FINANCE MARKETING UNIVERSITY

COMMERCE DEPARTMENT
INTERNATIONAL TRADE
Nghiemmarket.blogspot
(AVTMQT 3-4)
Chapter 1: Exporting and the Management of Ris!
Chapter ": #egotiating $e%i&er'
Chapter 3: #egotiating (ri)e * (a'ment
Trans%ate +mport * Export Contra)ts
,istening: -./siness Eng%ish0 C$ 1
(AVTMQT 2-3)
1! #egotiating +nspe)tion * $efe)ts %ia4i%it'!
"! ,ega% frame5or
3! Export Contra)t
-./siness Eng%ish0 C$ 60
EXPORTING AND THE EXPORT CONTRACT
$r! $r! 7ames R! (inne%%s
Compi%ed 4' Mr! #g/'en Thanh #ghiem
(8or +nterna% 9se :n%' )
September 2011
;'%%a4/s
CD 8, 9
-Lessons:
1. Exporting Management of Risk 4. Negotiating Inspetion ! Defet Lia"i#it$
%. Negotiating De#i&er$ '. Lega# (rame)ork
*. Negotiating +rie ! +a$ment ,. -.e Export Contrat .
TABLE OF CONTENTS
4! Exporting and the Management of Ris
2! #egotiating $e%i&er'
3! #egotiating (ri)e * pa'ment
<! #egotiating +nspe)tion * $efe)ts %ia4i%it'!
1! ,ega% frame5or
6! Export Contra)t
THIS PART IS USED FOR CD 8
8.1 ORIENTATION TO A NEW JOB
8.1.1 COMPREHENSION QUESTIONS
1) What does Anthony hae to do !" he #ants so$e %o""ee&
a. He has to 'ay () %ents "o* ea%h %+'.
,. He has to he-' h!$se-" to !t !n the .!t%hen.
%. He has to as. /a*a to $a.e so$e %o""ee "o* h!$.
0) I" yo+ *+n o+t o" 'en%!-s and 'a'e* at #o*.1 #he*e %an yo+ 2et $o*e&
a. "*o$ the .!t%hen
,. "*o$ the CEO3s o""!%e.
%. "*o$ the sto*e*oo$.
4) When E--en says1 5We hae "-e67t!$e he*e1 5#hat does !t $ean&
a. Wo*.e*s a*e not a-- on the sa$e s%hed+-e.
,. The*e a*e no %-o%.s at th!s %o$'any.
%. The*e !s t!$e "o* e6e*%!se at the o""!%e ee*y day.
8) Us!n2 T!""any as an e6a$'-e1 #hat sho+-d yo+ #hen !nt*od+%ed to a ne# %o7#o*.e*&
a. E6tend yo+* hand "o* a handsha.e.
,. As. the ne# e$'-oyee to $a.e so$e %o""ee.
%. S$!-e and -oo. at yo+* "eet.
() 9oes Anthony s'ea. a se%ond -an2+a2e&
a. :es1 he s'ea.s ;*en%h e*y #e--.
,. :es1 he s'ea.s a -!tt-e ;*en%h.
%. No1 he on-y s'ea.s En2-!sh.
<) Whe*e !s /a*a3s %+,!%-e&
a. It3s to the -e"t o" the ent*an%e doo*.
,. He* %+,!%-e !s on the she-" !n the sto*e*oo$.
%. It3s "*ee.
=) I" so$eth!n2 !s d!""!%+-t "o* yo+ at #o*.1 #h!%h 'h*ase %o+-d yo+ +se to e6'*ess th!s&
a. 5It3s >+!et do#n he*e.?
,. 5I3$ ha!n2 t*o+,-e.?
%. 5Th!n2s a*e %e*ta!n-y "-e6!,-e he*e.?
8) What !s Anthony ha!n2 t*o+,-e #!th today&
a. He3s ha!n2 t*o+,-e *e$e$,e*!n2 'eo'-e3s na$es.
,. He doesn3t *e$e$,e* ho# to s'ea. ;*en%h.
%. Anthony3s ha!n2 t*o+,-e dea-!n2 #!th !nte*nat!ona- a%%o+nts.
@) S+''ose yo+* ,oss #ants yo+ to !s!t M*. Ha*$on !n adan%e o" the des!2n $eet!n2. What do yo+
need to do&
a. Ca-- M*. Ha*$on and !n!te h!$ to ta-. #!th yo+ d+*!n2 the des!2n $eet!n2.
,. Ao to the des!2n $eet!n2 so yo+ %an te-- M*. Ha*$on a,o+t !t #hen yo+ !s!t h!$.
%. Meet #!th M*. Ha*$on "!*st1 ,e"o*e attend!n2 the des!2n $eet!n2.
1)) Whe*e !s Anthony3s #o*.s'a%e 2o!n2 to ,e at AdRad&
a. Anthony #!-- sha*e T!""any3s %+,e +nt!- h!s !s *eady.
,. H!s %+,!%-e !s the "!*st one on the -e"t as yo+ %o$e !n.
%. He3-- ,e #o*.!n2 !n E--en3s o""!%e "o* a %o+'-e o" #ee.s.
7Pe*.B Use o" a %o$'any %a* !s a %o$$on 'e*..
;*ee %o""ee !s C+st one o" the s$a-- 'e*.s o" #o*.!n2 he*e.
Th!s Co, has a -ot o" 2*eat 'e*.s1 !n%-+d!n2 a -ot o" "*ee t*ae- and $e$,e*sh!' at a nea*,y 2y$.
7Sto*e*oo$B 9!d yo+ -oo. !n the sto*e*oo$&
I sto%.ed the she-es !n the sto*e*oo$ C+st yeste*day.
A-$ost ee*yth!n2 yo+ need !s a-*eady on yo+* des.1 ,+t the e6t*a s+''-!es a*e sto*ed !n the
sto*e*oo$.
7What I needB What I need !s a %+' o" st*on2 %o""ee.
I3$ $a.!n2 a -!st o" #hat I need "o* $y t*!' to DeneE+e-a.
As soon as I "!nd #hat I need1 I3-- 2et to #o*..
7C+,!%-eB Sto' ,y $y %+,!%-e -ate*1 and #e %an ta-. a,o+t that.
The #o*st th!n2 a,o+t %+,!%-es !s that they hae no #!ndo#s.
I don3t hae an o""!%e o" $y o#n1 ,+t I hae a %o$"o*ta,-e -!tt-e %+,!%-e a-- to $yse-".
7As yo+ %o$e !nB As yo+ %o$e !n1 yo+3-- see the se%*eta*y3s des. C+st !ns!de the doo*.
P-ease sto' and s!2n the *e2!st*y as yo+ %o$e !n.
O+* o""!%e !s on the *!2ht as yo+ %o$e !nto the ,+!-d!n21 !t3s on the -e"t1 o" %o+*se.
Hae t*o+,-e
I a-#ays hae t*o+,-e "!nd!n2 $y #ay a*o+nd do#nto#n.
No1 #e d!dn3t hae t*o+,-e "!nd!n2 yo+* '-a%e7 yo+ 2ae +s e6%e--ent d!*e%t!ons.
She3s ha!n2 a -ot o" t*o+,-e #!th he* %o$'+te* today. She3s -ost see*a- "!-es a-*eady.
/ee' na$es st*a!2ht
9o yo+ th!n. yo+ %an .ee' a-- the na$es st*a!2ht.
/a*a3s e*y 2ood at .ee'!n2 na$es st*a!2ht.
When I sa# Ted1 I %a--ed h!$ T!$. I C+st %an3t see$ to .ee' these na$es st*a!2ht.

Sha*e
I3$ 2o!n2 to "!nd a *oo$$ate to sha*e e6'enses1 that #ay1 I %an 2et a ,ette* a'a*t$ent.
M!-es d*ea$ed that he had to sha*e a %+,!%-e #!th R!%..
The*e3s on-y one '!e%e o" %a.e -e"t. Aet t#o "o*.s1 and #e3-- sha*e !t.
Wo*.s'a%e
My #o*.s'a%e !s +s+a--y '*etty $essy.
It3s a s$a-- #o*.s'a%e1 ,+t yo+ sho+-d "!nd ee*yth!n2 yo+ need he*e.
H!s #o*.s'a%e +sed to ,e a s$a-- %+,e1 ,+t no# he has a ,!2 o""!%e #!th a #ooden des..
In
Is the do%to* !n&
M*. B+*ns !s o+t *!2ht no#1 ,+t I3-- -et yo+ .no# #hen he 2ets !n.
I 2+ess no,ody3s !n yet. The o""!%e !s %o$'-ete-y e$'ty.
St*a22-!n2
When the 2a$e ended !n de"eat1 the "ans #ent st*a22-!n2 ho$e.
On Monday $o*n!n2s1 the #o*.e*s %o$e st*a22-!n2 !n to the o""!%e.
Sto' st*a22-!n21 ,oysF Stay to2ethe* and $oe a -!tt-e "aste*F
;-e67t!$e
I3$ -oo.!n2 "o* a Co, #!th "-e67t!$e o''o*t+n!t!es.
9o yo+ hae "-e67t!$e he*e&
She needs a Co, #!th "-e67t!$e ,e%a+se he* %h!-d*en o"ten need he* at ho$e.
In adan%e
She d!dn3t s%hed+-e an a''o!nt$ent !n adan%e1 so she %o+-dn3t see the dent!st.
:o+3-- need to %an%e- yo+* *ese*at!on 08 ho+*s !n adan%e !n o*de* to 2et a *e"+nd.
I" yo+ had e6'-a!ned the '*o,-e$ !n adan%e1 then I #o+-d hae ,een '*e'a*ed to so-e !t.
;-e6!,-e
Oh1 %o$e onF Be "-e6!,-eF
:o+ %an %o$e anyt!$e. We3*e "-e6!,-e.
She3s not "-e6!,-e eno+2h "o* th!s Co,. Th!n2s a*e a-#ays %han2!n2 he*e1 and she hates %han2e.
;-+en%y
She has tota- "-+en%y not on-y !n S'an!sh1 ,+t a-so !n Po*t+2+ese and Ita-!an.
H!s "-+en%y !n Ja'anese o"ten s+*'*!ses o+* %-!ents.
S+san st+d!ed Ae*$an "o* yea*s1 ,+t nee* a%h!eed "-+en%y +nt!- she #ent to -!e !n Ae*$any.
Use"+-
Th!s .no#-ed2e #!-- ,e e*y +se"+- to o+* %o$'any.
9oes any,ody hae any +se"+- !deas&
:o* +$,*e--a !s ,ea+t!"+-1 ,+t !t %an3t ,e e*y +se"+- he*e !n the dese*t.
Inte*nat!ona-
W!-- the Co, !no-e !nte*nat!ona- t*ae-&
The Inte*nat!ona- ;ood Co+*t at the $a-- has ethn!% "ood "*o$ $any d!""e*ent %o+nt*!es.
O+* !nte*nat!ona- a%%o+nts a*e $+%h $o*e '*o"!ta,-e
EGGEN The .!t%hen !s do#n the*e. :o+3-- "!nd %o""ee the*e and a *e"*!2e*ato*1 !" yo+
#ant to ,*!n2 yo+* -+n%h.
ANTHON: 9o yo+ hae to 'ay "o* the %o""ee&
EGGEN No1 !tHs "*ee1 ,+t yo+ $!2ht hae to $a.e !t yo+*se-" so$et!$es.
ANTHON: ThatHs O/. ItHs a n!%e 'e*..
EGGEN :es1 !t !s. And do#n 'ast the .!t%hen !s the sto*e*oo$. I" yo+ need s+''-!es
-!.e 'ads o* 'ens1 yo+ %an 2et the$ "*o$ he*e. I0
ANTHON: What !" I %an3t "!nd #hat I need&
EGGEN :o+ %an as. /a*a. She .no#s #he*e ee*yth!n2 !s.
ANTHON: Hae I $et he*&
EGGEN SheHs the #o$an #ho s!ts !n the "!*st %+,!%-e on the -e"t as yo+ %o$e !n.
ANTHON: Oh1 yes. I3$ ha!n2 t*o+,-e .ee'!n2 a-- the na$es st*a!2ht.
EGGEN And th!s !s #he*e yo+H-- ,e #o*.!n2. :o+H-- ,e sha*!n2 a #o*.s'a%e #!th
T!""any M%A+!*e +nt!- #e %an 2et yo+ one o" yo+* o#n.
ANTHON: ThatHs "!ne. ItHs >+!et do#n he*e. Isn3t any,ody !n yet&
EGGEN Oh1 theyH-- %o$e st*a22-!n2 !n.
ANTHON: So ee*yone !snHt *e>+!*ed to #o*. the sa$e ho+*s&
EGGEN Oh1 no1 #e hae "-e67t!$e he*e. So ee*yone '+ts !n at -east 8) ho+*s1 ,+t
#hen they do !s '*etty $+%h +' to the$.
ANTHON: Ho# does that #o*. "o* $eet!n2s&
EGGEN We t*y to s%hed+-e the$ #e-- eno+2h !n adan%e so that ee*yone %an '-an
to ,e the*e.
ANTHON: Th!n2s a*e %e*ta!n-y $o*e "-e6!,-e he*e than at $y -ast Co,.
EGGEN That #as !n ;*an%e&
ANTHON: :es1 !t #as.
EGGEN :o+* "-+en%y !n ;*en%h #!-- ,e e*y +se"+- #hen dea-!n2 #!th so$e o"
o+* !nte*nat!ona- a%%o+nts.
TI;;AN: Aood $o*n!n21 E--en. He--o.
EGGEN T!""any1 th!s !s Anthony B*o#n1 o+* ne# #*!te*. TodayHs h!s "!*st day.
TI;;AN: N!%e to $eet yo+1 Anthony. We-%o$e.
ANTHON: Than. yo+. ItHs n!%e to $eet yo+1 too.
EGGEN T!""any C+st sta*ted #o*.!n2 he*e a "e# $onths a2o1 so sheH-- ,e a 2ood one to
as. "o* he-'.
TI;;AN: S+*e. I .no# #hat !tHs -!.e to ,e ne# and not .no# anyone o* #he*e th!n2s a*e.
ANTHON: Than. yo+. IH$ s+*e IH-- hae -ots o" >+est!ons.
EGGEN We--1 IHe 2ot to 2et Anthony oe* to see M*. S%ott !n H+$an Reso+*%es so #e %an
ta.e %a*e o" h!s 'a'e*#o*..
ANTHON: N!%e to $eet yo+. T!""any.
TI;;AN: See yo+ -ate*1 Anthony.
8.1.1 COMPREHENSION QUESTIONS
1) What does Anthony hae to do !" he #ants so$e %o""ee&
a. He has to 'ay () %ents "o* ea%h %+'.
,. He has to he-' h!$se-" to !t !n the .!t%hen.
%. He has to as. /a*a to $a.e so$e %o""ee "o* h!$.
0) I" yo+ *+n o+t o" 'en%!-s and 'a'e* at #o*.1 #he*e %an yo+ 2et $o*e&
a. "*o$ the .!t%hen
,. "*o$ the CEO3s o""!%e.
%. "*o$ the sto*e*oo$.
4) When E--en says1 5We hae "-e67t!$e he*e1 5#hat does !t $ean&
a. Wo*.e*s a*e not a-- on the sa$e s%hed+-e.
,. The*e a*e no %-o%.s at th!s %o$'any.
%. The*e !s t!$e "o* e6e*%!se at the o""!%e ee*y day.
8) Us!n2 T!""any as an e6a$'-e1 #hat sho+-d yo+ do #hen !nt*od+%ed to a ne# %o7#o*.e*&
a. E6tend yo+* hand "o* a handsha.e.
,. As. the ne# e$'-oyee to $a.e so$e %o""ee.
%. S$!-e and -oo. at yo+* "eet.
() 9oes Anthony s'ea. a se%ond -an2+a2e&
a. :es1 he s'ea.s ;*en%h e*y #e--.
,. :es1 he s'ea.s a -!tt-e ;*en%h.
%. No1 he on-y s'ea.s En2-!sh.
<) Whe*e !s /a*a3s %+,!%-e&
a. It3s to the -e"t o" the ent*an%e doo*.
,. He* %+,!%-e !s on the she-" !n the sto*e*oo$.
%. It3s "*ee.
=) I" so$eth!n2 !s d!""!%+-t "o* yo+ at #o*.1 #h!%h 'h*ase %o+-d yo+ +se to e6'*ess th!s&
a. 5It3s >+!et do#n he*e.?
,. 5I3$ ha!n2 t*o+,-e.?
%. 5Th!n2s a*e %e*ta!n-y "-e6!,-e he*e.?
8) What !s Anthony ha!n2 t*o+,-e #!th today&
a. He3s ha!n2 t*o+,-e *e$e$,e*!n2 'eo'-e3s na$es.
,. He doesn3t *e$e$,e* ho# to s'ea. ;*en%h.
%. Anthony3s ha!n2 t*o+,-e dea-!n2 #!th !nte*nat!ona- a%%o+nts.
@) S+''ose yo+* ,oss #ants yo+ to !s!t M*. Ha*$on !n adan%e o" the des!2n $eet!n2. What do yo+
need to do&
a. Ca-- M*. Ha*$on and !n!te h!$ to ta-. #!th yo+ d+*!n2 the des!2n $eet!n2.
,. Ao to the des!2n $eet!n2 so yo+ %an te-- M*. Ha*$on a,o+t !t #hen yo+ !s!t h!$.
%. Meet #!th M*. Ha*$on "!*st1 ,e"o*e attend!n2 the des!2n $eet!n2.
1)) Whe*e !s Anthony3s #o*.s'a%e 2o!n2 to ,e at AdRad&
a. Anthony #!-- sha*e T!""any3s %+,e +nt!- h!s !s *eady.
,. H!s %+,!%-e !s the "!*st one on the -e"t as yo+ %o$e !n.
%. He3-- ,e #o*.!n2 !n E--en3s o""!%e "o* a %o+'-e o" #ee.s.
8.0 GISTEN TO 9IRECTORS
8.4 TEAMWOR/
J E6%+se $e. T!""any1 %o+-d I ,othe* yo+ "o* a se%ond&
J :es&
J IH$ s+''osed to *e!e# the do%+$ents on the To+-o+se T*ae- a%%o+nt1 ,+t I %an3t a%%ess the
"o-de*.
J J+st %-!%. on the ne# a%%o+nts !%on.
J Than.s1 T!""any. So**y to !nte**+'t yo+.
J No '*o,-e$.
J Hey1 Anthony1 do yo+ hae a $!n+te to ta-. a,o+t th!s ne# '*oCe%t&
J S+*e. :o+H*e R!%.1 *!2ht&
J R!2hto1 'a-. No#1 IHe 2ot an !dea "o* th!s '*oCe%t that I th!n. #!-- *ea--y ,-o# the$ a#ay.
J Wo+-d yo+ 2+ys $!nd d!s%+ss!n2 th!s so$e#he*e e-se& IHe 2ot a dead-!ne.
J So**y1 T!"".
JWhy donHt I $eet yo+ !n yo+* o""!%e& I3-- ,e the*e !n "!e $!n+tes.
J Pe*"e%t. IH-- see yo+ the*e.
J Goo.1 Anthony1 IH$ so**y to ,-o# +' -!.e that.
J 9onHt #o**y a,o+t !t. ItHs +nde*standa,-e.
J ItHs C+st that I hae a -ot o" #o*. to do1 and ha!n2 to sha*e the #o*.s'a%e and the %o$'+te* $a.es
!t ha*de*.
J Is the*e anyth!n2 I %an do to $a.e !t eas!e*&
J :o+ %o+-d '!%. st+"" +' #hen yo+H*e done #!th !t.
J I 2+ess I hae ,een ,ad a,o+t -ea!n2 'a'e*s a-- oe* the des..
J It !snHt that yo+He ,een ,ad. ItHs C+st that #!th t#o o" +s !n th!s s$a-- s'a%e1 #e hae to th!n. a,o+t
the othe* 'e*son a-- the t!$e.
J I3-- 2et these o+t o" yo+* #ay no#.
J Th!s $+st ,e een ha*de* "o* yo+1 ,e!n2 ne# and a--.
J We--1 !t !snHt !dea-1 thatHs "o* s+*e. B+t I s+''ose !tH-- $a.e $e a''*e%!ate !t $o*e #hen I hae $y
o#n s'a%e.
JThatHs "o* s+*e.
J I3d ,ette* 2o see #hat R!%. #ants. See yo+ -ate*.
TI;;AN: Bye.
1) Who !nte**+'ts T!""any #h!-e sheHs #o*.!n2&
a. Anthony !nte**+'ts he*. ,. R!%. !nte**+'ts T!""any ,y as.!n2 he* a >+est!on. %. E--en does.
0) In th!s s%ene1 ho# does T!""any "ee- a,o+t ,e!n2 !nte**+'ted #h!-e sheHs #o*.!n2&
a. She "ee-s that Anthony and R!%. need he* he-'1 and sheHs 2o!n2 to he-' the$ *!2ht a#ay.
,. SheHs annoyed.
%. SheHs ha''y to hae so$eone to ta-. to.
4) Anthony says that heHs s+''osed to *e!e# so$e do%+$ents. What does he $ean&
a. HeHs o-+ntee*!n2 to *e!e# the do%+$ents. ,. ItHs 'a*t o" h!s Co, to *e!e# the
do%+$ents.
%. He doesnHt #ant to *e!e# the do%+$ents.
8) What '*o,-e$ does T!""any he-' Anthony #!th&
a. T!""any sho#s h!$ ho# to *e!e# do%+$ents.
,. She te--s h!$ #he*e to "!nd h!2h-!2hte*s and "-o''!es.
%. She he-'s Anthony -o%ate "o-de* !n h!s %o$'+te*.
() R!%. says that h!s !dea K#!-- ,-o# the$ a#ay.K What does !n"o*$a- e6'*ess!on $ean&
a. that no,ody #!-- +nde*stand h!s !dea ,. that ee*y,ody #!-- -eae h!$ a-one !n the
"+t+*e
%. that 'eo'-e #!-- ,e e*y !$'*essed #!th h!s !dea
<) What !s the $a!n to'!% o" %one*sat!on ,et#een Anthony and T!""any !n th!s s%ene&
a. TheyH*e d!s%+ss!n2 a ne# '*oCe%t.
,. The!* %one*sat!on !s a,o+t %o$'+te*s and ho# d!""!%+-t they %an ,e to #o*. #!th.
%. They ta-. a,o+t ho# ha*d !t !s to sha*e a s$a-- #o*.s'a%e.
=) Why !s T!""any !n a h+**y&
a. She has a dead-!ne ,. She a-#ays 2oes ho$e at (B)) oH%-o%.1 and !tHs a-*eady 8B() .
%. She has a -+n%h a''o!nt$ent and sheHs *+nn!n2 -ate.
8) When T!""any says that she !s so**y to K,-o#+' -!.e that1K ho# e-se %o+-d she e6'*ess he* "ee-!n2s&
a. KIH$ so**y to hea* yo+ had "-at t!*e.K ,. 5IH$ so**y to !nte**+'t yo+.? %. KIH$ so**y that I
2ot an2*y.K
@) S+''ose that a %o7#o*.e* !s eat!n2 -+n%h !n yo+* %+,e1 and th!s ,othe*s yo+. What 'h*ase %o+-d
yo+ +se to 'o-!te-y as. yo+* %o7#o*.e* to -eae&
a. K9o yo+ th!n. yo+ %o+-d %*+n%h those %h!'s a -!tt-e -o+de*&K
,. KWo+-d yo+ $!nd eat!n2 !n the .!t%hen&H
%. KA*e yo+ 2o!n2 to -eae $+sta*d sta!ns on $y %ha!* a2a!n&K
1)) Whe*e do R!%. and Anthony de%!de to $eet&
a. TheyH*e 2o!n2 to $eet !n the .!t%hen.
,. R!%. has *ese*ed a %on"e*en%e *oo$ "o* the!* $eet!n2.
%. AnthonyHs 2o!n2 to 2o to R!%.Hs o""!%e.
11) Why does R!%. %o$e to T!""anyHs %+,e1 and #hy does he 2o a#ay&
a. He %o$es to the %+,e to he-' Anthony #!th the %o$'+te* and he -eaes #hen heHs done.
,. T!""any !n!ted R!%. to the %+,e to he-' he*1 and he 2oes o+t to 2et %o""ee.
%. R!%. %o$es to ta-. to Anthony and he -eaes ,e%a+se heHs ,othe*!n2 T!""any.
10) Ho# do T!""any and Anthony dea- #!th the d!""!%+-ty o" sha*!n2 he* #o*.s'a%e&
a. They d!s%+ss the s!t+at!on. ,. They de%!de not to ta-. so they #onHt ,othe* ea%h othe*.
%. T!""any te--s Anthony that he %anHt +se he* %+,e any$o*e.
14) I" yo+* %o--ea2+e says that she has $eet!n2s a-- oe* to#n today1 #hat !s she te--!n2 yo+&
a. :o+* %o--ea2+e #!-- ho-d see*a- $eet!n2s at d!""e*ent t!$es !n he* o""!%e.
,. She has $eet!n2s !n $any d!""e*ent '-a%es today.
%. She $+st attend see*a- $eet!n2s do#nto#n today.
18) Wh!%h 'h*ase ,est "o--o#s o* 2oes #!th the e6'*ess!on1 K9onHt #o**yK&
a. K:o+ $ade a h+2e $!sta.e.K ,. K:o+H-- 2et %he#ed o+t "o* th!s.K %. KItHs not a
'*o,-e$.?
1() What does Anthony o""e* to do to $a.e !t eas!e* to sha*e the %+,e&
a. He o""e*s to do $ost o" h!s #o*. !n the sto*e*oo$.
,. HeHs 2o!n2 to as. R!%. to he-' the$ d!s%+ss the s!t+at!on.
%. HeHs 2o!n2 to '!%. +' h!s 'a'e*s and othe* st+"".
8.4 RE/0E1- CL2RI(IC2-I3N
ANTHON: L RIC/.
J R!%.1 ,e"o*e #e ta-. a,o+t the '*oCe%t1 %an I as. yo+ a >+est!on&
J S+*e th!n2. I %anHt 2+a*antee an ans#e* tho+2h.
JIHe $et a -ot o" 'eo'-e !n the 'ast %o+'-e o" days1 and $ost o" the$ a*e '*etty "*!end-y. B+t I
%anHt "!2+*e M!-es o+t.
J We-%o$e to the %-+,1 ,+ddy. No,ody %an.
JNo1 IH$ se*!o+s. HeHs e*y %o-d to $e. I $+st hae o""ended h!$ so$eho#1 ,+t I hae no !dea ho#.
J9on3t #o**y a,o+t !t. HeHs that #ay #!th ee*y,ody. The on-y 'e*son he ee* -!2htens +' #!th !s
E--en.
J So yo+ donHt th!n. I d!d so$eth!n2 to annoy h!$&
JG!"e annoys M!-es1 Anthony. HeHs ,as!%a--y a 2ood 2+y1 ,+t heHs C+st too se*!o+s and %anHt stand !t
#hen ee*y,ody !snHt e>+a--y as 2*!$.
J E--en doesnHt see$ so se*!o+s. Why does he -!2hten +' #!th he* and no,ody e-se&
RIC/ Those t#o hae ,een "*!ends s!n%e the Stone A2e. On%e yo+He .no#n M!-es "o* a "e#
$!--enn!a1 heH-- *e-a6 #!th yo+1 too.
ANTHON: When I #as !nt*od+%ed to h!$1 he see$ed 'o-!te eno+2h1 ,+t #hen I *an !nto h!$ !n the
-+n%h*oo$ yeste*day he ,a*e-y sa!d KH!K to $e.
RIC/ We--1 heHs 2ot a -ot on h!s $!nd these days.
ANTHON: What do yo+ $ean&
RIC/ O"" the *e%o*d1 *+$o* has !t that heHs -oo.!n2 "o* anothe* Co,.
ANTHON: Why !n the #o*-d #o+-d he do that&
RIC/ GetHs C+st say the*e a*e so$e 'eo'-e he*e #!th #ho$ o+* M!-es %anHt >+!te 2et a-on2.
ANTHON: B+t ee*y,ody he*e !s so "*!end-y. Why %anHt he ta-. to the$ a,o+t !t&
RIC/ Most-y ,e%a+se they #onHt ta.e !t as se*!o+s-y as he #!-- and then heH-- 2et een $adde*.
ANTHON: ThatHs ha*d to ,e-!ee.
RIC/ We--1 yo+ .no# +s %*eat!e ty'es. WeH*e +n'*ed!%ta,-e.
ANTHON: :o+ $ean !tHs yo+ that M!-es %an3t 2et a-on2 #!th&
JTo ,e "a!*1 !t !snHt a-- h!s "a+-t. We C+st don3t see eye7to7eye on $any th!n2s.
ANTHON: ThatHs too ,ad.
RIC/ It !s too ,ad. B+t !" #e don3t 2et ,a%. to #o*. he*e1 #e $!2ht ,e the ones -oo.!n2 "o* Co,s.
J O/. No#1 #hat #as yo+* !dea&
Q+est!ons
1 Whe*e a*e Anthony and R!%. $eet!n2&
a. !n E--enHs o""!%e ,. !n R!%.3s %+,!%-e %. !n the sto*e*oo$
= I" yo+ th!n. so$eone !s ,e!n2 too se*!o+s !n an !n"o*$a- sett!n21 #hat %an yo+ say&
a. No,ody %an. ,. KG!2hten +'.K %. S+*e th!n2.
= What does R!%. say a,o+t M!-esHs 'e*sona-!ty&
a. He says that M!-es -!.es to -!2hten +' #!th $ost o" h!s %o7#o*.e*s d+*!n2 $eet!n2s
,. R!%. says that M!-es !s %o-d #!th ee*y,ody e6%e't E--en.
%. R!%. th!n.s that M!-es !s e*y "*!end-y.
= Wh!%h 'h*ase %an yo+ +se to as. so$eone to .ee' yo+* !n"o*$at!on se%*et o* %on"!dent!a-&
a. Kthese daysK,. K*+$o* has !tK %.
5
o"" the *e%o*d?
= Why does R!%. say1 KWe C+st donHt see eye to eyeK&
a. HeHs !$'-y!n2 that h!s eyes!2ht !s ,ette* than M!-esHs.
,. Th!s !s h!s #ay o" say!n2 that heHs $+%h ta--e* than M!-es.
%. He $eans that he and M!-es d!sa2*ee.
1) What does Anthony #ant to ta-. a,o+t&
A)He #ants to ta-. a,o+t the #eathe*. B)He as.s R!%. to te-- h!$ so$eth!n2 a,o+t
E--en.
C)Anthony #ants to as. >+est!on a,o+t M!-es.
0) S+''ose that yo+ a*e ha!n2 t*o+,-e +nde*stand!n2 yo+* ,ossHs 'e*sona-!ty. Wh!%h 'h*ase #o+-d
e6'*ess th!s !dea&
A) KI C+st %anHt "!2+*e h!$ o+t.K B) KIH$ se*!o+s.K C) KI %anHt 2+a*antee an ans#e*.K
= R!%. says1 KWe-%o$e to the %-+,.K What does th!s $ean&
He $eans that Anthony !s no# a $e$,e* o" a s'e%!a- o*2an!Eat!on o" #*!te*s and a*t!sts.
R!%. !s !n!t!n2 Anthony to '-ay 2o-" #!th h!$.
It $eans that $any 'eo'-e hae had a s!$!-a* e6'e*!en%e.
= What !s AnthonyHs o'!n!on o" h!s %o7#o*.e*s&
He says that they a-- ta.e th!n2s too se*!o+s-y1 e6%e't "o* M!-es.
He th!n.s ee*yone see$s %o-d.
Anthony th!n.s they a*e "*!end-y1 e6%e't "o* M!-es
=Wh!%h state$ent ,est s+$$a*!Ees th!s s%ene&
R!%. t*!es to ta-. a,o+t M!-es1 ,+t Anthony doesnHt #ant to.
A"te* R!%. and Anthony d!s%+ss M!-es1 they de%!de to 2et to #o*..
Anthony and R!%. #o*. on '*oCe%t1 and then they sta*t ta-.!n2 a,o+t M!-es.
8.' 34-2IN 5EL+ 2nt.on$ ! -iffan$
ANTB Oh1 he--o T!""any. Wo+-d yo+ $!nd he-'!n2 $e #!th so$eth!n2&
J S+*e. What %an I do "o* yo+&
J I3$ #o*.!n2 on a ne# s-o2an "o* a t*ae- a2en%y1 and I3$ ha!n2 so$e '*o,-e$s.
J WhatHs the $atte*&
J We--1 they #ant a sho*t1 '+n%hy %at%h 'h*ase.
J We a-- .no# ho# easy !t !s to %o$e +' #!th those.
J :es1 #e--1 a-- IHe 2ot !s a ,+n%h o" s!--y 'h*ases1 none o" #h!%h h!ts the $a*..
...What hae yo+ %o$e +' #!th so "a*&
J?Te-- +s #he*e1 #eH-- 2et yo+ the*eK !s a,o+t the ,est IHe 2ot.
J H$$1 I see #hat yo+ $ean. Rhy$es a*e to+2h. What .!nd o" t*ae- do they s'e%!a-!Ee !n&
J R!2ht no# a-- .!nds1 ,+t theyH*e ho'!n2 to -+*e !n $o*e ,+s!ness t*ae-e*s #!th th!s ne# %a$'a!2n.
J We--1 %an yo+ #o*. the #o*d K,+s!nessK !nto a s-o2an&
J So$eth!n2 -!.e1 KItHs o+* ,+s!ness to 2et yo+ to yo+* ,+s!nessK&
J I -!.ed the "!*st one ,ette*. WhatHs the na$e o" the a2en%y&
J To+-o+se T*ae-. I th!n. !tHs the 'e*sonHs na$e o* so$eth!n2.
J Ho# a,o+t1 KNo t!$e to -ose& Ca-- To+-o+seK&
J TheyHe a-*eady *eCe%ted that one1 a,o+t a h+nd*ed yea*s a2o.
J We--1 -etHs #o*. on the1 KTa.e the hass-e o+t o" t*ae-K an2-e.
J KNea* o* "a*1 #eH-- 2et yo+ thatK&
J I #as th!n.!n2 $o*e a-on2 the -!nes o"1 KGet +s do the #o*. #h!-e yo+ *e-a6.K
J We--1 as yo+ %an see1 IH$ not %o$!n2 +' #!th anyth!n2.
J When I 2et ,-o%.ed -!.e that1 !t he-'s to #ande* a*o+nd and ta-. to 'eo'-e.
J I don3t *ea--y .no# anyone #e-- eno+2h to C+st d*o' !n on the$ !n the!* %+,e. IHd "ee- -!.e I3$
d!st+*,!n2 the$.
J 9on3t #o**y. Peo'-e do !t a-- the t!$e. TheyH-- -et yo+ .no# !" theyH*e ,+sy.
J Sho+-d I as. 'eo'-e "o* !n'+t&
J :o+ %o+-d1 ,+t ,e %a*e"+-. I" yo+ as.1 and then don3t +se !t1 they $!2ht "ee- s-!2hted.
J May,e I 2o "!nd R!%.. HeHs easy to ta-. to.
J HeHs s+%h a n+t that !t $!2ht he-' yo+ 2et yo+* %*eat!e C+!%es "-o#!n2.
J Whatee* #o*.s. Than.s. IH-- see yo+ -ate*.
J Aood -+%.F
8 What !s AnthonyHs '*o,-e$ !n th!s s%ene&
a. HeHs ha!n2 t*o+,-e %*eat!n2 a s-o2an. ,. He #ants to ta.e a ne# Co, at a t*ae- a2en%y.
%. He doesnHt .no# #he*e to 2et the s+''-!es he needs.
8 I" yo+ a*e te$'o*a*!-y +na,-e to ,e %*eat!e1 ho# %an yo+ e6'*ess th!s '*o,-e$&
a. IH$ ,-o%.ed. ,. I -!.ed the "!*st one.K %. I see #hat yo+ $eanK
8 Ho# does T!""any t*y to he-' Anthony at "!*st&
a. She t*!es ,*a!nsto*$!n2 so$e !deas #!th h!$.
,. She te--s h!$ that h!s "!*st !dea !s e*y 2ood.
%. She te--s h!$ to 2o to -+n%h and she #!-- th!n. o" a s-o2an "o* h!$.
8 T!""any and Anthony donHt %*eate a 2ood s-o2an. What does T!""any s+22est ne6t&
a. She s+22ests that Anthony 2et a d!""e*ent Co,.
,. T!""any s+22ests that Anthony ta-. to 'eo'-e a*o+nd the o""!%e.
%. She s+22ests that he +se h!s "!*st !dea ,e%a+se !tHs the ,est one.
8 What !s T!""anyHs att!t+de !n th!s s%ene&
a. T!""any !s %o-d and *+de ,. SheHs he-'"+- and s+''o*t!e. %. She see$s to ,e annoyed and
!$'at!ent.
< What does Anthony do #hen heHs ha!n2 so$e '*o,-e$s #!th h!s #o*.&
a. He te--s h!s ,oss that the Co, !s too d!""!%+-t. ,. He '*etends that ee*yth!n2 !s "!ne.
%. He as.s a %o7#o*.e* "o* he-'.
=. I" yo+ th!n. yo+* %o7#o*.e* !s ha!n2 so$e '*o,-e$s1 ho# %an yo+ e6'*ess that yo+Hd -!.e to
he-'&
a. Te-- +s #he*e. ,. WhatHs the $atte*K %. IH-- see yo+ -ate*.
8 Wh!%h t#o #o*ds a*e an e6a$'-e o" a *hy$e&
a. nea*1 "a* ,. hass-e1 t*ae- %. #he*e1 the*e
@ Ho# does Anthony "ee- a,o+t d*o''!n2 !n on h!s %o7#o*.e*s&
a. HeHs a"*a!d he $ay ,othe* the$ !" theyH*e ,+sy.
,. He #ants to d*o' !n1 ,+t T!""any te--s h!$ no,ody does that at AdRad.
%. He enCoys 2o!n2 to !s!t h!s %o7#o*.e*s #!tho+t te--!n2 the$ !n adan%e.
1). What does Anthony de%!de to do&
a. HeHs 2o!n2 to d*!n. so$e C+!%e and t*y to th!n. so$e $o*e.
,. HeHs 2o!n2 to ta-. to R!%.. %. He de%!des to d*o' !n on E--en.
8.< 9ISCUSS SENSITIDE ISSUES
TI;;. R!%.1 do yo+ hae a se%ond&
RIC/. S+*e1 T!""1 #hatHs on yo+* $!nd&
TI;;. The*eHs so$eth!n2 !$'o*tant I need to ta-. to yo+ a,o+t.
ANTHON: I %an 2o so$e#he*e e-se !" yo+ t#o #ant to ta-..
RIC/. No1 stay *!2ht #he*e yo+ a*e. WeHe 2ot no se%*ets.
TI;;. R!%.1 yo+ '*o,a,-y donHt een *ea-!Ee !t1 ,+t I3$ +n%o$"o*ta,-e #!th the #ay yo+ so$et!$es
t*eat $e !n $eet!n2s.
RIC/. :o+H*e +n%o$"o*ta,-e& Ta-. to M!-es. HeHs !n a2ony.
TI;;. IH$ se*!o+s1 R!%.. At "!*st I -et !t 'ass1 ,+t !tHs ,e%o$!n2 a '*o,-e$.
RIC/. I3$ so**y. T!"". I had no !dea I #as do!n2 anyth!n2 to $a.e yo+ +n%o$"o*ta,-e.
ANT. May,e I3-- 2et a %+' o" %o""ee.
TI;;. :o+ $ay not *ea-!Ee !t1 ,+t #hen yo+ !nte**+'t $e1 o* ans#e* "o* $e !n a $eet!n21 !t $a.es !t
see$ as tho+2h #hat I hae to say !snHt !$'o*tant.
RIC/. Aee1 T!""1 I th!n. $ay,e yo+H*e $a.!n2 too ,!2 a dea- o+t o" noth!n2. I donHt $ean to $a.e !t
-oo. that #ay.
TI;; What yo+ $ean to do !s ,es!de the 'o!nt. The "a%t !s1 yo+ do !t1 and I th!n. !t h+*ts $y
%*ed!,!-!ty.
RIC/ :o+ .no# ho# I a$ !n the 2!e7and7ta.e o" a $eet!n21 I 2et !nto the $!dd-e o" !t.
TI;; And thatHs "!ne1 +' to a 'o!nt. B+t #hen yo+ sta*t $ono'o-!E!n2 the $eet!n21 I "ee- -!.e I $!2ht
as #e-- not een ,e the*e. K
RIC/ A-- yo+ hae to do !s C+$' !n and I3-- sh+t +'1 honest.
TI;; I %anHt do that. I hate to !nte**+'t 'eo'-e.
RIC/ Een !" theyHe !nte**+'ted yo+&
TI;; ThatHs *!2ht. R!%.. I donHt #ant to #o*. th!s #ay any$o*e.
RIC/ :o+ donHt $ean that yo+H*e th!n.!n2 o" *es!2n!n2&
TI;; GetHs not 2et $e-od*a$at!%. What I3$ say!n2 !s I "ee- -!.e !tHs da$a2!n2 o+* #o*.!n2
*e-at!onsh!'.
RIC/ O/1 ho# a,o+t !" #e $eet ea%h othe* ha-" #ay&
TI;; Ho# do yo+ '*o'ose #e do that&
RIC/ I3-- do $y ,est to not !nte**+'t yo+1 ,+t !" I do1 yo+ !nte**+'t $e ,a%..
TI;; No1 thatHs C+st sh!"t!n2 the *es'ons!,!-!ty to $e1 and the #ay I see !t1 !tHs yo+* '*o,-e$1 not
$!ne.
RIC/. :o+He 2ot a 'o!nt. O/1 I '*o$!se I #onHt %+t yo+ o"" any$o*e1 no $atte* ho# e6%!ted I
2et.
TI;;. That so+nds '*etty 2ood. And !" yo+ do !nte**+'t $e a2a!n1 #hat then&
RIC/. I3-- ,+y yo+ -+n%h at The H+n2*y G!Ea*d.
TI;;. IH-- sett-e "o* a %o""ee at Coo- Beans.
RIC/. ItHs a dea-.
TI;;. Than.s1 R!%..
RIC/. No '*o,-e$1 T!"". IH-- see yo+ -ate*.
TI;;. O/1 R!%..
QUESTIONS
1. Who o'ens the d!s%+ss!on !n th!s s%ene and ho#&
a. T!""any does1 ,y as.!n2 R!%. !" he has a se%ond. ,. R!%. does1 ,y say!n21 KWhat3s on yo+* $!nd&H
%. Anthony does1 ,y 2ett!n2 +' to 2o "o* %o""ee.
@. What 'o-!te a%t!on does Anthony ta.e d+*!n2 the d!s%+ss!on&
a. He o""e*s to 2et %o""ee "o* ee*yone.
,. He o""e*s to -eae the %+,e so that R!%. and T!""any %an ta-. $o*e '*!ate-y.
%. He o""e*s s+22est!ons to he-' T!""any and R!%. +nde*stand ea%h othe*.
4 What !s the s+,Ce%t o" th!s d!s%+ss!on&
a. T!""any doesnHt -!.e R!%. to !nte**+'t he* d+*!n2 $eet!n2s.
,. R!%. th!n.s that T!""any !s h+*t!n2 h!s %*ed!,!-!ty.
%. R!%. th!n.s that T!""any !s $ono'o-!E!n2 the $eet!n2s.
@. What !s a 2ood 'h*ase to +se !" yo+ #ant to %o$'*o$!se #!th so$eone&
a. KGetHs $eet ea%h othe* ha-"#ay.K ,. 5ThatHs ,es!de the 'o!nt.K %. K9onHt ,e $e-od*a$at!%.K
1). Wh!%h o" the "o--o#!n2 !s an e6a$'-e o" %+tt!n2 so$eone o""&
a. :o+ !nte**+'t a %o--ea2+e #ho hasnHt "!n!shed s'ea.!n2.
,. :o+ %a-- the o""!%e to *es%hed+-e yo+* $eet!n2.
%. :o+ *es!2n "*o$ yo+* Co, ,e%a+se yo+ %anHt 2et a-on2 #!th a %o--ea2+e.
<. Why does Anthony 2o o+t "o* a %+' o" %o""ee&
a. He #ants to -et T!""any and R!%. ta-. '*!ate-y.
,. T!""any as.ed h!$ to 2et he* a %+'
%. HeHs "ee-!n2 e*y s-ee'y and #ants a %a""e!ne ,oost.
=. S+''ose yo+* %-!ent $a.es a *+de %o$$ent1 and yo+* ,oss te--s yo+ to -et !t 'ass. What does yo+*
,oss #ant yo+ to do&
a. As. the %-!ent to a'o-o2!Ee.
,. I2no*e the %o$$ent o* '*etend yo+ d!dnHt hea* !t.
%. Ma.e a *+de %o$$ent ,a%. to the %-!ent.
8. Why does R!%. !nte**+'t T!""any d+*!n2 $eet!n2s&
a. He 2ets e6%!ted and has a -ot to say.
,. He #ants he* to *es!2n "*o$ he* Co,.
%. He #ants to "+*the* %*ed!,!-!ty and e$,a**ass he*.
@. What does R!%. s+22est that T!""any do a,o+t the '*o,-e$&
a. He says that T!""any sho+-d te-- h!$ to sh+t +'.
,. He s+22ests that T!""any C+$' +' and do#n ee*y t!$e he !nte**+'ts he*.
%. He says that T!""any sho+-d !nte**+'t h!$ !n the sa$e $anne*.
1). T!""any and R!%. $a.e a dea-. What a*e the te*$s o" the!* dea-&
a. I" R!%. !nte**+'ts he* a2a!n1 he has to ,+y he* a %o""ee at Coo- Beans.
,. I" T!""any ta.es R!%. to -+n%h at The H+n2*y G!Ea*d1 R!%. #!-- sto' !nte**+'t!n2 he*.
%. R!%. #onHt !nte**+'t any$o*e !" she '*o$!ses to sto' ye--!n2 at h!$.
8.6 211ER- 20-53RI-7
RIC/B H!1 E--en. WhatHs +'&
EGGEN Co$e on !n1 R!%.. Wo+-d yo+ $!nd %-os!n2 the doo*&
RIC/ S+*e. Why a-- the se%*e%y&
EGGEN No se%*e%y. I C+st donHt #ant to ,e !nte**+'ted.
RIC/ Uh+h. So+nds -!.e IH$ 2o!n2 to 2et %he#ed o+t.
EGGEN R!%.1 %an yo+ ,e se*!o+s "o* "!e $!n+tes&
RIC/ I3-- t*y1 ,+t yo+ .no# $e1 Boss.
EGGEN :o+ .no# that M!-es has 2!en not!%e& HeHs 2o!n2 to #o*. "o* Coo- Beans.
RIC/ Coo-.
EGGEN Not %oo- at a--. ThatHs 2o!n2 to -eae +s s%*a$,-!n2 to "!-- h!s 'os!t!on. RIC/ J+st st+"" a sh!*t
and '*o' !t +' !n the $eet!n2 *oo$. ThatH-- ,e "!ne. EGGEN G!sten1 R!%.1 I donHt hae t!$e "o* "oo-!n2
a*o+nd.
RIC/B O/1 E--en1 I3$ at yo+* se*!%e. What do yo+ need done&
EGGENB I need yo+ to #*a' +' yo+* #o*. on the ;ood ;o*+$ '*oCe%t.
RIC/B No '*o,-e$. IH-- hae !t done !n '-enty o" t!$e.
EGGENB R!%.1 #eH*e a-*eady a #ee. 'ast dead-!ne. I hae to na!- do#n a "!na- date no#. RIC/B Ho#
a,o+t a #ee. "*o$ today&
EGGENB Not 2ood eno+2h. I hae a $eet!n2 #!th Te**en%e Gand!s Monday $o*n!n2.
RIC/B Then #hen do yo+ need !t&
EGGENB IH-- need !t ,y ;*!day noon !n o*de* to hae t!$e to 2et *eady "o* the $eet!n2.
RIC/B Aee1 E--en1 I donHt .no#. ThatHs .!nd o" t!2ht.
EGGENB I .no# !t !s R!%.1 and IHd -!.e to 2!e yo+ $o*e t!$e1 ,+t I3$ +' a2a!nst the #a--.
RIC/B O/1 Ch!e"1 yo+H-- hae !t ,y noon on ;*!day.
EGGENB Than.s1 R!%..
RIC/B As the #ha*" ,oss sa!d !n On the Wate*"*ont1 5Get3s 2o to #o*.F?
2ns)er t.e fo##o)ing 89estions
1)) What does R!%. th!n. th!s $eet!n2 !s a,o+t&
a. R!%. th!n.s that 'e*ha's E--en !s 2o!n2 to *e'*!$and h!$.
,. He th!n.s $ay,e E--en #!-- o""e* h!$ M!-esHs o-d Co,.
%. R!%. th!n.s E--enHs an2*y at h!$ "o* %he#!n2 2+$.
11) Why does E--en as. R!%. to %-ose the doo*&
a. She doesnHt #ant to ,e !nte**+'ted #h!-e sheHs ta-.!n2 to R!%..
,. She #ants to ye-- at R!%. and she doesnHt #ant anyone e-se to hea* he*.
%. She #ants to te-- R!%. se%*et.
11) S+''ose yo+ a*e !n a $eet!n21 and yo+* ,oss as.s yo+ to ,e se*!o+s "o* "!e $!n+tes. What do
yo+ need to do&
a. Con%ent*ate on the !$'o*tan%e o" the $eet!n2.
,. Te-- a "e# 2ood Co.es to he-' ee*yone -!2hten +'.
%. Goo. at yo+* #at%h and donHt ta-. "o* e6a%t-y "!e $!n+tes.
11) Wh!%h !s the ,est #ay to te-- a %o--ea2+e that yo+He *es!2ned "*o$ yo+* Co,&
a. KIH$ 2o!n2 to 2et %he#ed o+t.K ,. KNo se%*e%y.K %. KIHe 2!en not!%e.K
11) Ho# does R!%. *ea%t to the ne#s that M!-es has 2!en not!%e&
a. He doesnHt ,e-!ee the ne#s ,. He ,e%o$es e*y se*!o+s and e6'*esses %on%e*n. %. HeHs not
,othe*ed at a--.
<) What does E--en a%t+a--y #ant to d!s%+ss at th!s $eet!n2 #!th R!%.&
a. E--en #ants R!%. to s%hed+-e a $eet!n2 #!th M!. Gand!s.
,. E--en #ants h!$ to "!n!sh +' the ;ood ;o*+$ '*oCe%t ASAP.
%. SheHs as.!n2 R!%. to e6tend the dead-!ne "o* the ;ood ;o*+$ '*oCe%t.
=) Ho# does E--en "ee- a,o+t M!-esHs *es!2nat!on&
a. SheHs not ,othe*ed at a--.
,. She th!n.s !tHs e*y %oo- that heHs -ea!n2.
%. She th!n.s !t #!-- ,e d!""!%+-t to "!nd so$eone to do h!s Co,.
8) I" yo+* %-!ent as.s yo+ to na!- do#n a date "o* a $eet!n21 #hat do yo+ need to do&
a. A!e yo+* %-!ent th*ee o* "o+* 'oss!,-e dates "o* the $eet!n2.
,. Choose a s'e%!"!% date "o* the $eet!n2 and not!"y yo+* %-!ent.
%. Se%+*e the %a-enda* to the #a-- so !t #onHt ,-o# a#ay #hen the #!ndo#Hs o'en.
@) When does E--en need the ;ood ;o*+$ #o*. "*o$ R!%.&
a. ,y 10B)) on ;*!day ,. ,y noon on Monday %. a #ee. "*o$ today
1)) What !s R!%.Hs *es'onse to E--enHs *e>+est&
a. HeHs ha''y that E--en has 2!en h!$ $o*e t!$e.
,. He says that he %anHt 'oss!,-y %o$'-ete the #o*. ,y ;*!day.
%. HeHd -!.e $o*e t!$e ,+t '*o$!ses to "!n!sh ,y the dead-!ne.
8.8 NE-:3R;IN<
TI;;AN: Wo#1 #hat a -on2 dayF
ANTHON: No .!dd!n2. A*e yo+ 2ett!n2 *eady to -eae&
TI;;AN: No. I3e 2ot so$e th!n2s to do.
ANTHON: 9o yo+ #o*. -ate a -ot&
TI;;AN: So$et!$es. B+t th!s !snHt #o*..
ANTHON: What a*e yo+ do!n2&
TI;;AN: IH$ #*!t!n2 a 'a'e* "o* a %o+*se I3$ ta.!n2. I don3t hae a %o$'+te* at ho$e.
ANTHON: 9o they $!nd !" yo+ do that .!nd o" #o*. !n the o""!%e&
TI;;AN: Oh1 no. As -on2 as I do !t on $y o#n t!$e1 E--en says !tHs "!ne. And I ,*!n2 !n $y o#n
'a'e* to '*!nt !t on.
ANTHON: A*e yo+ ta.!n2 %o+*ses "o* "+n1 o* #o*.!n2 to#a*d a de2*ee&
TI;;AN:B I3$ #o*.!n2 on an M.B.A. IHd -!.e to o'en $y o#n a2en%y so$e day.
ANTHON:B Wo#1 thatHs !$'*ess!e. :o+ .no#1 I too. a %o+'-e o" ,+s!ness %o+*ses and enCoyed
the$. I3d -!.e to ta.e $o*e so$e day.
TI;;AN: Why not sta*t no#& AdRad #!-- 'ay t+!t!on "o* #o*.7*e-ated %o+*ses.
ANTHON: Een "o* a ne# e$'-oyee&
TI;;AN: :eah1 !tHs one o" the ,ene"!ts. 9!dn3t yo+ *ead the $an+a-& ANTHON: I
C+st s.!$$ed th*o+2h !t. I haen3t had $+%h t!$e *e%ent-y.
TI;;AN: We--1 the %o+*ses a*e 2*eat and yo+ $eet a -ot o" !nte*est!n2 'eo'-e that %an he-' yo+ !n
yo+* %a*ee*.
ANTHON: In a %o--e2e %-ass&
TI;;AN: S+*e. A%t+a--y1 I hea*d a,o+t th!s Co, "*o$ one o" $y '*o"esso*s.
ANTHON: Se*!o+s-y&
TI;;AN: Rea--y. A -ot o" the tea%he*s a*e t!ed !nto -o%a- ,+s!nesses. ItHs 2*eat "o* net#o*.!n2.
ANTHON: It #o+-dnHt h+*t $e to $eet so$e 'eo'-e.
TI;;AN: And $ost o" the st+dents a*e '*o"ess!ona-s #o*.!n2 to adan%e the!* s.!--s.
IHe $ade -ots o" %onta%ts !n the ade*t!s!n2 ,+s!ness th*o+2h $y %-asses.
ANTHON: Is the '*o2*a$ ha*d to 2et !nto&
TI;;AN: :es1 ,+t I th!n. !" yo+He %o$e th!s "a* !n yo+* %a*ee*1 yo+He '*o,a,-y 2ot the %*edent!a-s
to ,e a%%e'ted.
ANTHON: 9o yo+ .no# #ho I sho+-d ta-. to a,o+t a''-y!n2&
TI;;AN: Why donHt yo+ %o$e to %-ass #!th $e to$o**o# n!2ht& I %an !nt*od+%e yo+ to P*o"esso*
Cassand*a and sho# yo+ a*o+nd.
ANTHON: That #o+-d ,e 2*eat. A*e yo+ s+*e yo+ don3t $!nd&
TI;;AN: Not at a--. C-ass sta*ts at seen. We %an -eae "*o$ he*e and 2*a, so$eth!n2 to eat "!*st.
ANTHON: Than.s1 T!""any. IH-- see yo+ to$o**o#.
TI;;AN: Aood n!2ht.
QUESTIONSB
1 T!""any and Anthony a*e ta-.!n2 !n T!""anyHs %+,e. What t!$e !s !t&
a. ItHs '*o,a,-y a,o+t (B)) '.$. ,e%a+se theyH*e ta-.!n2 a,o+t 2o!n2 ho$e.
,. It $+st ,e a,o+t noon s!n%e theyH*e '-ann!n2 to 2et so$e -+n%h.
%. It see$s to ,e ea*-y !n the $o*n!n2 as theyHe C+st a**!ed at the o""!%e.
0) Why !s T!""any '-ann!n2 to stay at the o""!%e&
a. T!""any needs to +se the %o$'+te* "o* so$e %o--e2e #o*..
,. She #ants to #o*. -ate so that she %an ea*n so$e e6t*a $oney.
%. T!""any !s "!n!sh!n2 AnthonyHs #o*. "o* h!$.
10) Why !s T!""any ta.!n2 %o+*ses&
a. She #ants to 2et an MBA de2*ee and sta*t he* o#n ,+s!ness.
,. She ta.es %o+*ses "o* "+n.
%. E--en to-d T!""any she has to ta.e the %o+*ses.
10 ) Whe*e %an yo+ "!nd !n"o*$at!on a,o+t the ,ene"!ts yo+* %o$'any o""e*s&
a. !n any ne#s'a'e* ,. !n the e$'-oyee $an+a- %. !n a %o--e2e %-ass
10) I" yo+ #ant to $eet and ta-. #!th 'eo'-e #ho %an he-' yo+ adan%e yo+* %a*ee*1 ho# %an yo+
e6'*ess th!s&
a. KThatHs !$'*ess!e.K,. KI ta.e %o+*ses C+st "o* "+n.K %. KI need to do so$e
net#o*.!n2.K
<) What do yo+ .no# a,o+t T!""anyHs #o*. ha,!ts&
a. She a-#ays #o*.s -ate1 !n%-+d!n2 today. ,. She nee* #o*.s -ate %. She so$et!$es #o*.s
-ate
=) Why does T!""any #*!te he* %o--e2e 'a'e*s at the o""!%e&
a. She doesnHt #ant to ,+y 'a'e* "o* he* '*!nte* at ho$e.
,. T!""any #*!tes he* 'a'e*s #hen sheHs ,o*ed ,y the #o*. at the o""!%e.
%. T!""any doesnHt hae %o$'+te* at ho$e.
8) I" a %o--ea2+e as.s yo+ to s.!$ th*o+2h a *e'o*t ,e"o*e a $eet!n21 #hat do yo+ need to do&
a. Co+nt the 'a2es !n the *e'o*t and s!2n !t at the ,otto$.
,. Read ee*y #o*d and ,e '*e'a*ed to d!s%+ss ee*y deta!-.
%. Read the *e'o*t >+!%.-y1 -oo.!n2 "o* the $a!n 'o!nts.
@) Ho# do yo+ .no# that T!""any has +sed net#o*.!n2 as a #ay to he-' he* %a*ee*&
a. She says that she hea*d a,o+t he* '*esent Co, "*o$ %o--e2e '*o"esso*.
,. She says that she 2ot th!s Co, th*o+2h an e$'-oy$ent a2en%y.
%. She says that the on-y #ay to 2et a 2ood Co, !s ,y *ead!n2 the ne#s'a'e* ads.
1)) T!""any !n!tes Anthony to 2o to %-ass #!th he6 to$o**o# n!2ht. What a*e they 2o!n2 to do "!*st&
a. TheyH*e 2o!n2 to o*de* d!nne* "*o$ the %o$e* *esta+*ant to eat at the o""!%e.
,. T!""any and Anthony a*e 2o!n2 to hae a >+!%. d!nne*.
%. TheyH*e 2o!n2 to 2o to a *esta+*ant "o* a *e-a6ed1 seen7%o+*se $ea-.
1-3
C52+-ER 1: IN-R3D0C-I3N
Exporting an= t.e Management of Risk
1. The Meeting of Min!
THE PROBLEM
An e6'o*te* and a ,+ye* ne2ot!ate to2ethe*. At so$e 'o!nt the*e !s a K$eet!n2 o" $!nds?B the!*
d!s%+ss!on ,e%o$es an a2*ee$ent 7 #!th !$'o*tant -e2a- %onse>+en%es "o* ,oth s!des. Th!s !s a
dan2e*o+s $o$ent "o* "!*st7t!$e e6'o*te*sB they .no# the!* -o%a- $a*.et ,+t e6'o*t!n2 'oses ne#
'*o,-e$s !n '*od+%t!on1 de-!e*y and1 a,oe a--1 '*!%!n2. A hasty a2*ee$ent %an %a+se heay -osses.
THE PRINCIPLEB On%e scope Mthe 2oods to ,e
de-!e*ed) and price Mthe '*!%e to ,e 'a!d) a*e
a2*eed1 the ,a*e ,ones o" a -e2a--y en"o*%ea,-e
a2*ee$ent a*e !n '-a%e. Be"o*e *ea%h!n2 s+%h
a2*ee$ent1 the e6'o*te* $+st ,e s+*e that the
2oods %an ,e de-!e*ed e6a%t-y as '*o$!sed and
that the '*!%e %oe*s the "+-- %ost o" e6'o*t!n2.
N2+yNn tO%B
MPt .h! hQn2 hoR STU% %h+yVn 2!ao Q 2!R sW
'hX! thanh toRn STU% %R% ,Nn thYa th+Zn1 th[ %R%
>+y S\nh t*on2 hU' S]n2 sW t*^ nNn %_ h!`+ -a%
%+bn2 %hc. T*Td% .h! .e .ct hU' S]n21 nhQ 6+ft
.hg+ 'hX! SX$ ,Xo *hn2 hQn2 hoR STU% 2!ao
theo Sin2 nhT thYa th+Zn Q 2!R %X 'hX! tjnh Scn
tft %X %R% %h! 'hj -!Nn >+an Scn 6+ft .hg+.
*ehea*sa-
IN MORE DEPTH
Get +s sta*t #!th a %o$'any and a '*od+%t. O""!%e Ente*'*!ses $a.es o""!%e "+*n!t+*eB !ts $a!n -!nes
a*e des.s and "!-!n2 %a,!nets. The %o$'any !s -o%ated !n a %o+nt*y #e %an %a-- Verbena, a s$a--
!s-and *e'+,-!%1 so$e#he*e !n the t*o'!%s. O""!%e Ente*'*!ses #as "o+nded ten yea*s a2o ,y A-e%
Pate-. So "a*1 Pate- has so-d '*od+%ts on-y on the do$est!% $a*.et.
At a se$!na* !n 1@@(1 Pate- $eets J+-!ana Ao$eE1 o#ne* o" Es'e*anEa T*ad!n2. Es'e*anEa T*ad!n2
!s an !$'o*t7e6'o*t %o$'any -o%ated !n Es'e*anEa1 a dee-o'!n2 %o+nt*y1 a-so !n the t*o'!%s.
Ao$eE sees a 'otent!a- $a*.et "o* Pate-Hs o""!%e "+*n!t+*e !n Es'e*anEa. A ne2ot!at!on ,e2!ns. The
t#o ne2ot!ato*s >+!%.-y *ea%h an a2*ee$ent1 a HH$eet!n2 o" $!ndsK as -a#ye*s %a-- !tB O""!%e
Ente*'*!ses #!-- s+''-y 4) -eathe*7%oe*ed e6e%+t!e %ha!*s "o* #h!%h Es'e*anEa T*ad!n2 #!-- 'ay
k@.))).
1
KEe*yth!n2 e-se1K they say1 K#e %an a2*ee #hen the t!$e %o$es.?
Th!s a2*ee$ent1 a-tho+2h noth!n2 !s !n #*!t!n2 and no deta!-s hae ,een #o*.ed o+t1 !s a contractB
ea%h s!de has %o$$!t$ents to the othe*l,oth hae *!2hts1 and ,oth hae d+t!es. What a*e these
*!2hts and d+t!es& O""!%e Ente*'*!ses has the d+ty to de-!e* the %ha!*s and the *!2ht to %o--e%t
'ay$ent. Es'e*anEa T*ad!n2Hs s!t+at!on !s e6a%t-y %o$'-e$enta*yB !t has the *!2ht to *e%e!e the
%ha!*s and the d+ty to 'ay "o* the$. In %ont*a%t -an2+a2e1 the s%o'e o" the %ont*a%t !s 4) %ha!*s1 and
the '*!%e !s k@.))).
S%o'e a2a!nst '*!%elthat !s the essen%e o" the e6'o*t %ont*a%t. GetHs -oo. $o*e %-ose-y at s%o'e1
'*!%e1 and the asso%!ated *!s.s.

1C3+E +RICE
Get3s -oo. $o*e %-ose-y at s%o'e1 '*!%e1 and asso%!ated *!s.s.
;!*st1 scopeB the '*od+%t. An e6'o*ta,-e '*od+%t #!-- no*$a--y ,e $at+*e1 !n othe* #o*ds1 the
$an+"a%t+*e* sho+-d hae e6'e*!en%e !n $a.!n2 the '*od+%t and eno+2h '*od+%t!on %a'a%!ty !n
%o'!n2 #!th the s!Ee o" the o*de*1 >+a-!ty ass+*an%e '*o,-e$s sho+-d a-*eady ,e so-ed.
C-ose-y *e-ated to s%o'e !s Delivery. The e6'o*te* $+st hae a%%ess to sa"e and t!$e-y $eans o"
de-!e*yB "o* e6a$'-e1 the e6'o*t o" %+t "-o#e*s #!-- %e*ta!n-y -ose $oney +n-ess the 2*o#e* !s
%e*ta!n o" *e2+-a* and *e-!a,-e a!* sh!'$ent. Un"o*t+nate-y1 e6'o*te*s so$et!$es %ont*a%t to s+''-y
2oods ,+t "a!- to th!n. a,o+t the '*o,-e$s o" de-!e*!n2 the!* 2oods +nt!- a"te* the %ont*a%t !s
s!2ned. By then !t !s too -ateB a ,ad na$e !n the t*ade o* an e6'ens!e -a#s+!t a*e the %o$$on
*es+-ts o" th!s -a%. o" "o*es!2ht.
1
B Most o" the dea-s !n th!s ,oo. a*e deno$!nated !n De*,ena do--a*s MDk). Th!s !$a2!na*y has no
steady a-+e and !s -!a,-e to "-oat "*o$ %ha'te* to %ha'te*.
And "!na--y price. 9oes the %ont*a%t '*!%e %oe* the e6'o*te*3s %osts and -eae a *easona,-e '*o"!t
$a*2!n. Ans#e*!n2 th!s >+est!on %a--s "o* %a*e"+- and .no#-ed2ea,-e '*!%!n2. The*e a*e t#o '*!%!n2
$ode-s a*e #o*th $ent!on!n2B the "*ee $a*.et and the -oaded $a*.et $ode-. ;!*st the 5"*ee7$a*.et?
a''*oa%h.
In a $a*.et that !s "*ee1 a $an+"a%t+*e* %a-%+-ates e6'o*t '*!%es ,y add!n2B
a. The %ost o" $a.!n2 the 2oods !n the "a%to*ym
,. An a''*o'*!ate 'o*t!on o" the oe*head %osts o" the "a%to*y Me.2.1!" the e6'o*t dea- !s #o*th
0n o" ann+a- sa-es1 the e6'o*t '*!%e sho+-d !n%-+de *o+2h-y 0n o" ann+a- oe*head %osts)m
%. The e6t*a %osts asso%!ated #!th e6'o*t!n2 Me.2.1 the %ost o" !nte*nat!ona- "a6es and te-e'hone
%a--s1 add!t!ona- "*e!2ht %osts1 the ad$!n!st*at!e %ost o" '*e'a*!n2 the "+-- e6'o*t
do%+$entat!on1 the %ost o" #a!t!n2 'e*ha's n!nety days "o* 'ay$ent *athe* than the +s+a-
th!*ty1 and so on)m
d. A '*o"!t $a*2!n Mh!2h eno+2h to $a.e a "a!* '*o"!t ,+t -o# eno+2h to $a.e the 2oods
%o$'et!t!e !n the !ntended $a*.et.)
The *es+-t!n2 '*!%e !s a "a!* *e"-e%t!on o" the $an+"a%t+*e*Hs %osts1 '-+s a *easona,-e e6'e%tat!on o"
'*o"!t. Cha*2!n2 a -o#e* '*!%e !$$ed!ate-y e*odes '*o"!t1 the e*os!on that >+!%.-y -eads to -osses.
Situation
Verbena Fan is a successful producer in the domestic market. It is looking for new markets and sees good
potential sales in Esperanza.
First Calculations
The wholesale price of the product is $3 cheaper in Verbena than the wholesale price of a comparable product
in Esperanza. Negotiations with an importer in Esperanza begin. To secure the business Verbena Fan !uotes
an attracti"e price of $##. The contract is signed.
$20
$holesale price of
fan in Verbena
$23
$holesale price of
similar product in
Esperanza
$22
E%port price low enough
to beat competition in
Esperanza
The Learning Process
&uring manufacture and shipping additional costs continuall' arise. $hen pa'ment is later than e%pected
Verbena Fan must borrow from the bank further increasing costs $arrant' claims are more e%pensi"e
internationall' than the' are locall'(more costs
$23
$hen the e%tra
costs of e%port
production emerge
the real wnole sale
price is higher.
$25
$hen pa'ment is
made later than
e%pected the cost of
capital dri"es up the
wholesale price still
further.
$26
)fter warrant' claims
are met the true
wholesale price
emerges.
The Outcome
)n e%pected profit of up to $# per fan turns into a actual loss of $*
$4
+oss per fan
T,E )N)T-./ -F )N E01-2T +-33
The a*!th$et!% o" e6'o*t!n2 !s o"ten so,e*!n2B the $an+"a%t+*e*3s e6'o*t '*!%e !s -!.e-y to ,e
a''*e%!a,-y h!2he* than the '*!%e he %ha*2es -o%a--y7 and !t $ay #e-- ,e $o*e than any ,+ye* !s
'*e'a*ed to 'ay. B+t #hy& What a*e the e6t*a %osts that d*!e e6'o*t '*!%es +ne%ono$!%a--y h!2h&
These %osts "a-- !nto th*ee %ate2o*!esB
o 9!*e%t add!t!ona- %ostsm
o Intan2!,-e $ana2e$ent %ostsm
o The %ost o" %a'!ta-.
Direct Additional Costs
So$e add!t!ona- %osts a*e eas!-y !dent!"!ed. So$e e6a$'-esB !nte*nat!ona- te-e'hone %a--s a*e %-ea*-y
$o*e e6'ens!e than -o%a- onesm %ost-y "o*e!2n t*ae- !s ne%esHsa*y "o* "a%e7to7"a%e ne2ot!at!onm 'a%.7
a2!n2 $+st o"ten ,e +'2*aded to #!thstand a sea Co+*ney o* *o+2h hand-!n2. E6t*e$e-y !$'o*tant a*e
the e6t*a %osts o" $eet!n2 #a**anty %-a!$sB a #a**anty *e'a!* that %osts a "e# do--a*s to $a.e !n
De*,ena #!-- %ost "a* $o*e #hen the "+-- !nte*nat!ona- %osts a*e added !n.
0
Intangible Management Costs
Othe* %osts a*e -ess tan2!,-eB "o* e6a$'-e1
$!s+nde*stand!n2s %an a*!se !" "o*e!2n -an2+a2es
a*e !no-edm $ana2e$ent t!$e $+st ,e !nested
!n %o$'-et!n2 e6'o*t "o*$a-!t!esB o,ta!n!n2 the
%e*t!"!%ate o" o*!2!n o* the e6'o*t -!%ense1
ne2ot!at!n2 the t*ans'o*t %ont*a%t1 %o--e%t!n2 a
-ette* o" %*ed!tla-- a*e t!$e7%ons+$!n2 a%t!!t!es.
Ch! 'hj >+Xn -e p h[nh
C_ nhqn2 %h! 'hj .hR% *ft .h_ nh[n thfyB j
dr1 hU' S]n2 !ct ,hn2 n2os! n2q1 nc+ nhQ
6+ft .hg+ h!V+ sa! %_ thV dtn Scn ,]! thTun2m
,P 'hZn >+Xn -e 'hX! $ft nh!v+ thu! 2!an SV -o
thw tr% %hxn2 ty 6+ft .hg+ nhT %hxn2 thT
6+ft 6x hoz% 2!fy 'h{' 6+ft .hg+1 *]! 'hX!
SQ$ 'hRn hU' S]n2 Zn %h+yVn1 $^ tjn drn2
thT 7 tft %X Sv+ %|n Scn nh!v+ n2Tu! tha$ 2!a
Q %pn2 ty 'hX! $ft t!vn SV t*X -T}n2 %ho h~.
The Cost of Caital
The %ost o" %a'!ta- $+st a-so ,e %ons!de*edB -etHs ta.e an e6a$'-e. Pate- !s %ha*2!n2 k@1))) "o* 4)
%ha!*s. Pe*ha's k11))) o" th!s !s e6'e%ted '*o"!tlthe *e$a!n!n2 k81))) a*e h!s %osts. In h!s o#n
%o+nt*y1 Pate- !s 'a!d #!th!n th!*ty days1 so1 ass+$!n2 he 'ays h!s o#n s+''-!e*s and h!s #o*."o*%e on
t!$e1 he has a de,t o" k81))) "o* a,o+t a $onth. At 1(n ann+a- !nte*est1 that #!-- %ost h!$ a,o+t
k1)). I" he has to #a!t th*ee $onths "o* 'ay$ent1 h!s de,t #!-- %ost h!$ k4)). H!2he* !nte*est *ates
M!n so$e %o+nt*!es ,an.s %ha*2e 8(n) and -on2e* #a!t!n2 'e*!ods #!-- >+!%.-y #!'e o+t h!s e6'e%ted
'*o"!t.
P*e%!se %a-%+-at!ons a*e o"ten d!""!%+-tB %o**e%t a--o%at!on o" oe*head o* an a%%+*ate a--o#an%e "o*
the %ost o" de-ay !n 'ay$ent de'end on *e-!a,-e ,+s!ness data and %ons!de*a,-e $ana2e$ent
e6'e*t!se. GetHs ass+$e1 tho+2h1 that *e-!a,-e data !s aa!-a,-e to the e6'o*te*. A so,e* *e!e# o" the
"a%ts then !nd!%ates #hethe* e6'o*t!n2 !s -!.e-y to ,e '*o"!ta,-e o* not. I" not1 thenl-!.e a-- ,ad dea-s
le6'o*t!n2 sho+-d ,e ao!ded.
What then !s the K-oadedK $a*.et& In '*a%t!%e e*y "e# $a*.ets o""e* the "*ee and sta,-e %ond!t!ons
#e hae C+st d!s%+ssedl!n $ost $a*.ets "a%to*s ,eyond s+''-y and de$and1 %ost and '*o"!t
!n"-+en%e '*!%e. These d!sto*t!ons a*e o" t#o $a!n ty'esB promotional and macroeconomic.
Promotional Loading
In o*de* to '*o$ote a '*od+%t !n a ne# $a*.et e6'o*te*s o"ten s-ash '*!%esB to 2a!n a "ootho-d !n the
$a*.et1 the e6'o*te* de%!des to t*adel "o* a sho*t #h!-e7 at a -oss. The e6'o*te* assesses "!*st #hat
'*!%e #!-- ,e att*a%t!e !n the e6'o*t $a*.et and then o""e*s the 2oods at that '*!%el#hethe* !t
%*eates a '*o"!t o* not.

See Cha'te* 41 Se%t!on 1 "o* a deta!-ed e6a$'-e.

Macroeconomic Loading
In dee-o'!n2 %o+nt*!es1 '*!%!n2 !s so$et!$es d!sto*ted ,y an +*2ent need to ea*n "o*e!2n %+**en%yB !"
the '*!%e !s to ,e 'a!d !n "o*e!2n %+**en%y1 the e6'o*te* o""e*s 2oods at +n*ea-!s!!%a--y -o# '*!%es.
E6'o*t !n%ent!e s%he$es a-so !n"-+en%e '*!%!n2B e6'o*te*s so$et!$es de%!de to se-- a%%ost '*!%e Mo*
,e-o#) and to ta.e the !n%ent!e 'a!d ,y the!* o#n 2oe*n$ent as the!* K'*o"!t.K S+%h d!sto*ted
'*!%!n2 !s d!%tated $o*e ,y e%ono$!% than ,y '+*e-y %o$$e*%!a- %ons!de*at!ons.
Many "a%to*s !n"-+en%e e6'o*t '*!%!n2. To .ee' th!n2s s!$'-e1 ho#ee*1 #hen th!s ,oo. s'ea.s o"
K'*!%eKm !t $eans the "*ee7$a*.et '*!%e.
The $aCo* '*o,-e$ o" e6'o*t '*!%!n2 !s no# a''a*entB the add!t!ona- %osts1 !" %o**e%t-y %a-%+-ated1
o"ten !n%*ease the e6'o*te*Hs '*!%e +nt!- he !s not %o$'et!t!e !n any "o*e!2n $a*.et. ;o* $any #o+-d7
,e e6'o*te*s the %*+%!a- >+est!on !s a-#aysl#!-- I $a.e a '*o"!t "*o$ e6'o*t!n2& On-y %a*e"+-
%a-%+-at!on %an ans#e* that >+est!onland the $an+"a%t+*e* $+st ,e #a*y o" ente*!n2 a -e2a--y
,!nd!n2 a2*ee$ent +nt!- the ans#e* !s %-ea*.
Get +s *et+*n1 then1 to O""!%e Ente*'*!ses and the e6'o*t o" the %ha!*s. Ass+$e that Pate- !s
%ond+%t!n2 h!s ,+s!ness #!se-y1 !n othe* #o*dsB
He %an '*od+%e the %ha!*s #!tho+t '*o,-e$s o" >+a-!ty o* >+a-!tyB
He has a%%ess to e""e%t!e t*ans'o*tat!onB
He !s %a-%+-at!n2 h!s '*!%e on the K"*ee and sta,-eK $ode-.
W!-- he $a.e a '*o"!t& It see$s -!.e-y. No# he $+st %ons!de* the *!s.s o" do!n2 e6'o*t ,+s!ness and
"!nd a $eans o" %o'!n2 #!th the$.
4)3E 3T5&/6 ) 7ood &eal8
3tud' the scenario below and then answer the !uestions. If 'our answer is 9No: gi"e 'our reasons.
In ;ul' <==# ;oe )nderson started a compan' in Verbena to manufacture foot balls. ,is workshop has the
capacit' to make >?? footballs a week working one eight@hour shift fi"e da's a week. )t present A.a' #?<?B he
is selling <#?? footballs a week on the Verbenan market. Cecause of the o"ertime shifts necessar' and
because of problems with the suppl' of leather !ualit' is unreliable about <?? balls a week are returned to the
factor'. )nderson replaces these returned balls immediatel' and without !uestion. )ndersonDs price structure
Ain Verbena dollarsB is6
4ost of labor and materials per ball $3
4ost of running the business per week $<#??.??
3elling price per ball Ano discountsB $*.#>
)nderson is now approached b' ;uliana 7omez of Esperanza Trading. 3he wants to bu' >?? footballs a
week for E months6 she orders a price per ball of $*.#?@ take it or lea"e it.
)ssume that the go"ernment of Verbena offers no e%port incenti"es and there are no foreign e%change
problems.
1. ,ow much is the cost of a foot ball8
2. Is )nderson making a profit at present8 Yes, but a small profit.
3. &oes he ha"e the manufacturing capacit' to handle this order8 No.
4. Is his product Fmature:8
No, because of too many returns.
5. If he accepts the deal will he make mone' on it8
Probably not. He will have problems all roun.
E. $h' is this a good contract for )nderson8
). The product is normall' be immature
C. The manufacturer should ha"e e%perience in making the product
4. The manufacturer should ha"e enough production capacit' in coping with the size of the order.
&. The !ualit' assurance problems should alread' be sol"ed.
+R2C-ICE: -rans#ate into >ietnamese
Contrat for ferti#i?er
No: @1-9*A B7C- 24C
9ateB Se'. )= 1@@@
Bet#eenB ..............
Add*essB.............
Te-B
Te-e6B................;a6B................
Re'*esented ,y M*................. He*e!na"te* %a--ed
The B+ye*
AndB ................
Add*essB.............
Te-B......................
Te-e6B...................;a6B................... Re'*esented ,y
M*........... He*e!na"te* %a--ed The Se--e*
It !s $+t+a--y a2*eed ,et#een ,oth s!des to s!2n
th!s %ont*a%t #!th te*$s and s'e%!"!%at!ons
s'e%!"!ed he*e+nde*B
It !s $+t+a--y a2*eed ,et#een ,oth s!des to s!2n
th!s %ont*a%t #!th te*$s and s'e%!"!%at!ons
s'e%!"!ed he*e+nde*B
2R-ICLE 1: C3MM3DI-7 !
1+ECI(IC2-I3N
1.1 Co$$od!tyB UREA ;ERTIGIER
1.0 O*!2!nB IN9ONESIA
1.4 S'e%!"!%at!onB 7 N!t*o2enB 8<n $!n.
7 Mo!st+*eB ).(n $a6.
7 B!+*etB 1.)n $a6.
7 Co-o*B Wh!te
7 ;*ee "-o#!n2B t*eated #!th Ant!7 Ca.!n2
1.8 Pa%.!n2B 7 () .2 net !n Po-y'*o'y-en Woen
,a2 #!th 'o-ythy-ene !nne* -!ne* 7 0n o" tota- ,a2
as e$'ty s'a*e ,a2s to ,e s+''-!ed "*ee o" %ha*2e
2R-ICLE %: 0NI- +RICE - /02N-I-7 !
-3-2L 2M30N-
0.1 Un!t '*!%eB US9 1=8 MT CL; Ho%h!$!nh
C!ty Po*t
0.0 Q+ant!tyB 1)1))) MT M '-+s o* $!n+s 1)n at
se--e*Hs o't!on)
0.4 Tota- a$o+ntB US9 11=8)1))) M7 1)n at
se--e*Hs o't!on)
SayB US 9o--a*s one $!--!on seen h+nd*ed e!2hty
tho+sand.
2R-ICLE *: 15I+MEN- - DELI>ER7
4.1 T!$e o" sh!'$entB not -ate* than Se'te$,e*
1@@4
4.0 Po*t o" -oad!n2B Indones!a $a!n 'o*ts
4.4 9est!nat!on 'o*tB Ho%h!$!nh C!ty Po*t
4.8 Not!%e o" sh!'$entB
W!th!n 0 days a"te* the sa!-!n2 date o" %a**y!n2
esse- to S.R D!etna$1 the Se--e* sha-- not!"y ,y
%a,-e to the B+ye* the "o--o#!n2 !n"o*$at!onB
GC n+$,e*
A$o+nt
Na$e and nat!ona-!ty o" the esse-
B!-- o" Gad!n2 n+$,e* date
Po*t o" -oad!n2
9ate o" sh!'$ent
E6'e%ted date o" a**!a- at d!s%ha*2!n2 'o*t
4.( Sh!''!n2 $a*.B
UREA
8<n NITROAEN MINIMUM
1n BIURET MAIMUM
).(n MOISTURE MAIMUM
() /AS NET
USE NO HOO/S
MA9E IN IN9ONESIA
One s!de '*!nted !n 2*een %o-o*
4.< 9!s%ha*2!n2 te*$sB
When Not!%e o" Read!ness tende*ed ,e"o*e noon1
-ayt!$e sha-- ,e %o$$en%ed "*o$ 14B)) on the
sa$e date1
7 When Not!%e o" Read!ness tende*ed a"te*noon1
-ayt!$e sha-- ,e %o$$en%ed "*o$ 8B)) on ne6t
date
4.= 9!s%ha*2!n2 te*$B @))MT day WW9SHE
EIU
Dem/ Des: USD 2,000/ half
2R-ICLE 4: +27MEN-
8.1 By !**eo%a,-e Gette* o" C*ed!t at s!2ht "o*n
BG date "o* the "+-- a$o+nt o" the %onnt*a%t a-+e
8.0 GC Bene"!%!a*yB /OGON
INTERNATIONAG CORP.
8( M+2yo7 9on21 Ch+n2 A+1 Seo+- 7 /o*ea
8.4 GC ad!s!n2 Ban.B /OREA ;IRST BAN/
Seo+- 7 /o*ea
8.8 Ban. o" O'en!n2 GCB DIETCOMBAN/
EIMBAN/
8.( T!$e o" o'en!n2 GCB #!th!n Se'. 1( 1@@@
8.< Pay$ent do%+$entsB
Pay$ent sha-- ,e $ade +'on *e%e!'t o" the
"o--o#!n2 do%+$entsB
7 44 o" %-ean on ,oa*d B!-- o" Gad!n2 $a*.ed
;REIAHT PREPAI9
7 Co$$e*%!a- !no!%e !n t*!'-!%ate
7 Pa%.!n2 -!st !n t*!'-!%ate
7 Ce*t!"!%ate o" o*!2!n !ss+ed ,y $an+"at+*e*
7 SUCO;IN9OHs Ce*t!"!%ate on >+a-!ty #e!2ht
7 One %o'y o" sa!-!n2 te-e6 sh!''!n2 ad!%e
7 Re$a*.B the sh!''!n2 do%+$ent a%%e'ta,-e
7 14 BG M the to' %o'y ) and t*ans'o*t do%+$ents
sent ,y 9HG
2R-ICLE ': (3RCE M2DE0RE
St*!.e1 sa,ota2e1 #h!%h $ay ,e o%%+*es !n O*!2!n
Co+nt*y sha-- ,e %ons!de*ed as ;o*%e MaCe+*e
2R-ICLE ,: 2R4I-R2-I3N
<.1 In the e6e%+t!on %o+*se o" th!s %ont*a%t1 a--
d!s'+tes not *ea%h!n2 at a$!%a,-e a2*ee$ent sha--
,e sett-ed ,y the E%ono$!% A*,!t*at!on ,oa*d o"
Ho%h!$!nh C!ty +nde* the *+-es o" the
Inte*nat!ona- Cha$,e* o" Co$$e*%e #hose
a#a*ds sha-- ,e "!na- and ,!nd!n2 ,oth 'a*t!es
<.0 A*,!t*at!on "ee and othe* *e-ated %ha*2es sha--
,e ,o*ne ,y the -os!n2 'a*ty1 +n-ess othe*#!se
a2*eed.
2R-ICLE 6: +EN2L-7
=.1 To de-ay sh!'$ent de-ay 'ay$ent
In %ase de-ay sh!'$ent de-ay 'ay$ent ha''ens1
the 'ena-ty "o* de-ay !nte*est #!-- ,e ,ased on
ann+a- *ate 1( 'e*%ent
=.0 To de-ay o'en!n2 GCB
In %ase de-ay o'en!n2 GC ha''ens1 the Se--e* has
the *!2ht to de-ay sh!'$ent
=.4 To %an%e--at!on o" %ont*a%t
I" Se--e* o* B+ye* #ant to %an%e--ed the %ont*a%t1
(n o" the tota- %ont*a%t a-+e #o+-d ,e %ha*2ed as
'ena-ty to that 'a*ty.
2R-ICLE 8: <ENER2L C3NDI-I3N
8.1 By s!2n!n2 th!s %ont*a%t1 '*e!o+s
%o**es'onden%e and ne2ot!at!ons %onne%ted
he*e#!th sha-- ,e n+-- and o!d
8.0 Th!s %ont*a%t %o$es !nto e""e%t "*o$ s!2n!n2
date1 any a$end$ent and add!t!ona- %-a+se to
these %ond!t!ons sha-- ,e a-!d on-y !" $ade !n
#*!tten "o*$ and d+ty %on"!*$ed ,y ,oth s!des.
8.4 Th!s %ont*a%t !s $ade !n < Enn2-!sh o*!2!na-s1
ea%h s!de .ee's 4.
+R2C-ICE: -rans#ate into >ietnamese
Contrat for ferti#i?er HU' S]n2 'hn ,_n M,Xn t!cn2 D!`t)
No: @1-9*A B7C- 24C
9ateB Se'. )= 1@@@
Bet#eenB ..............
Add*essB.............
Te-B
Te-e6B................;a6B................
Re'*esented ,y M*................. He*e!na"te* %a--ed
The B+ye*
AndB ................
Add*essB.............
Te-B......................
Te-e6B...................;a6B................... Re'*esented
,y M*........... He*e!na"te* %a--ed The Se--e*
It !s $+t+a--y a2*eed ,et#een ,oth s!des to s!2n
th!s %ont*a%t #!th te*$s and s'e%!"!%at!ons
s'e%!"!ed he*e+nde*B MOG9 ENAGISH)
5Ep FGng p.Hn "In
1J: @1-9*AB7C- 24C
N2Qy )=)81@@@
A!qaB..........
\a %hB.....
!`n thos!B.........
Te-e6B...........;a6B.........
9o pn2 ................ -Q$ Ss! d!`n
9Td! Sy 2~! -Q BNn M+a
DQB.................................
\a %hB.................
!`n thos!B...............
Te-e6B.................. ;a6B................
9o n2 ..................... -Q$ Ss! d!`n
9Td! Sy 2~! -Q B BNn BRn
5ai "Kn t.oL t.9Mn kN .Ep FGng &Oi n.Png
FiQ9 kiRn &S 89i T. FUE nK9 ra =UOi FH$:
2R-ICLE 1: C3MM3DI-7 !
1+ECI(IC2-I3N
1.1 Co$$od!tyB UREA ;ERTIGIER
1.0 O*!2!nB IN9ONESIA
1.4 S'e%!"!%at!onB
7 N!t*o2enB 8<n $!n.
7 Mo!st+*eB ).(n $a6.
7 B!+*etB 1.)n $a6.
7 Co-o*B Wh!te
7 ;*ee "-o#!n2B t*eated #!th Ant!7 Ca.!n2
1.8 Pa%.!n2B 7 () .2 net !n Po-y'*o'y-en Woen
,a2 #!th 'o-yethy-ene !nne* -!ne* 7 0n o" tota-
,a2 as e$'ty s'a*e ,a2s to ,e s+''-!ed "*ee o"
%ha*2e)
!v+ 1B HQn2 hoR Q >+y %R%h . th+Zt
1.1 TNn hQn2B Phn +*N
1.0 N2+]n 2%B Indones!a
1.4 Q+! %R%h . th+ZtB
7 N!t*o2en M Ss$) B 8<n t! th!V+
7 $ SPB )1(n t! Sa
7 B!+*etB 11)n t! Sa
7 MQ+ sO%B t*On2
7 Hst *u!B STU% 6 -j ,hn2 Ant!7 Ca.!n2
1.8 _n2 2_!B () .2 .hpn2 .V ,ao PP %_ -d'
t*on2 ,hn2 PE 0n tn2 s ,ao dn2 -Q$ ,ao da
'hn2 M ,ao .hpn2) STU% %+n2 %f' $!n 'hj
2R-ICLE %: 0NI- +RICE - /02N-I-7 !
-3-2L 2M30N-
0.1 Un!t '*!%eB US9 1=8 MT CL; Ho%h!$!nh
C!ty Po*t
0.0 Q+ant!tyB 1)1))) MT M '-+s o* $!n+s 1)n at
se--e*Hs o't!on)
0.4 Tota- a$o+ntB US9 11=8)1))) M7 1)n at
se--e*Hs o't!on)
SayB US 9o--a*s one $!--!on seen h+nd*ed
e!2hty tho+sand.
!v+ 0B }n 2!R7 S -TUn2 7 Tn2 2!R t*\
0.1 }n 2!RB 1=81)) US9 MT CL; %Xn2 H]
Chj M!nh
0.0 S -TUn2B 1).))) MT M7 1)n t+ theo -aa
%h~n %wa ,Nn BRn)
0.4 Tn2 t*\ 2!RB 1.=8).))) US9 M 7 1)n t+
theo -aa %h~n %wa BNn BRn)
Ah! ,hn2 %hqB MPt t*!`+ ,Xy t*$ tR$ $T}!
n2Qn US9
2R-ICLE *: 15I+MEN- - DELI>ER7
4.1 T!$e o" sh!'$entB not -ate* than Se'te$,e*
1@@4
4.0 Po*t o" -oad!n2B Indones!a $a!n 'o*ts
4.4 9est!nat!on 'o*tB Ho%h!$!nh C!ty Po*t
4.8 Not!%e o" sh!'$entB
W!th!n 0 days a"te* the sa!-!n2 date o" %a**y!n2
esse- to So%!a-!st Re'+,-!% o" D!etna$1 the Se--e*
sha-- not!"y ,y %a,-e to the B+ye* the "o--o#!n2
!n"o*$at!onB
GC n+$,e*
A$o+nt
Na$e and nat!ona-!ty o" the esse-
B!-- o" Gad!n2 n+$,e* date
!v+ 4B A! Q 2!ao hQn2
4.1 Thu! 2!an 2! hQn2B .hpn2 t* h}n thRn2 @
n$ 1@@@
4.0 CXn2 ,% hQn2B nhqn2 %Xn2 %hjnh ^
Indones!a
4.4 CXn2 ScnB CXn2 t' H] Chj M!nh
4.8 Thpn2 ,Ro 2! hQn2B
T*on2 n2 )0 n2Qy sa+ n2Qy .h^! hQnh
%wa tQ+ Zn tX! Scn nTd% CHHCN D!`t Na$1
,Nn BRn sW 'hX! thpn2 ,Ro %ho ,Nn M+a ,hn2
S!`n tjn nhqn2 thpn2 t!n sa+ SyB
GC s...
A!R t*\
TNn Q >+% t\%h tQ+
Po*t o" -oad!n2
9ate o" sh!'$ent
E6'e%ted date o" a**!a- at d!s%ha*2!n2 'o*t
4.( Sh!''!n2 $a*.B
UREA
8<n NITROAEN MINIMUM
1n BIURET MAIMUM
).(n MOISTURE MAIMUM
() /AS NET
USE NO HOO/S
MA9E IN IN9ONESIA
One s!de '*!nted !n 2*een %o-o*
4.< 9!s%ha*2!n2 te*$sB
When Not!%e o" Read!ness tende*ed ,e"o*e
noon1 -ayt!$e sha-- ,e %o$$en%ed "*o$ 14B)) on
the sa$e date1
7 When Not!%e o" Read!ness tende*ed a"te*noon1
-ayt!$e sha-- ,e %o$$en%ed "*o$ 8B)) on ne6t
date
4.= 9!s%ha*2!n2 te*$B @))MT day WW9SHE
EIU
Dem/ Des: USD 2,000/ half
CXn2 ,% hQn2
N2Qy 2! hQn2
N2Qy da .!cn tQ+ Scn ^ %Xn2 db hQn2
4.( /j $ h!`+ Zn tX!B .j $ h!`+ %wa ,Nn BRn
UREA
8<n NITROAEN MINIMUM
1n BIURET MAIMUM
).(n MOISTURE MAIMUM
() /AS NET
USE NO HOO/S
MA9E IN IN9ONESIA
M=t 4>n ph?i s@n mA/ xanh %B )C'!
4.< Nhqn2 S!v+ .!`n db hQn2B
.h! thpn2 ,Ro sn sQn2 STU% 2! td! t*Td% 10B))
2!u t*Ta1 thu! 2!an db hQn2 ,Ot S|+ ty 14B)) 2!u
%n2 n2Qy.
/h! thpn2 ,Ro sn sQn2 db hQn2 STU% 2! td! Qo
,+! %h!v+1 thu! 2!an db hQn2 sW ,Ot S|+ ty 8B))
2!u sRn2 %wa n2Qy hp$ sa+
4.= !v+ .!`n db hQn2B @)) MT n2Qy
MWW9SHE EIU U) n2Qy -Q$ !`% tt t*u!
.hpn2 .V %hw nhZt Q n2Qy - .hpn2 STU% tjnh .V
%X .h! s drn2
T!vn 'hst t!vn thT^n2B 0 ))) US91))) US9
2R-ICLE 4: +27MEN-
8.1 By !**eo%a,-e Gette* o" C*ed!t at s!2ht "o*n
BG date "o* the "+-- a$o+nt o" the %onnt*a%t
a-+e
8.0 GC Bene"!%!a*yB /OGON
INTERNATIONAG CORP.
8( M+2yo7 9on21 Ch+n2 A+1 Seo+- 7 /o*ea
8.4 GC ad!s!n2 Ban.B /OREA ;IRST BAN/
Seo+- 7 /o*ea
8.8 Ban. o" O'en!n2 GCB DIETCOMBAN/
EIMBAN/
8.( T!$e o" o'en!n2 GCB #!th!n Se'. 1( 1@@@
8.< Pay$ent do%+$entsB
Pay$ent sha-- ,e $ade +'on *e%e!'t o" the
"o--o#!n2 do%+$entsB
7 04 o" %-ean on ,oa*d B!-- o" Gad!n2 $a*.ed
;REIAHT PREPAI9
7 Co$$e*%!a- !no!%e !n t*!'-!%ate
7 Pa%.!n2 -!st !n t*!'-!%ate
7 Ce*t!"!%ate o" o*!2!n !ss+ed ,y $an+"at+*e*
7 SUCO;IN9OHs Ce*t!"!%ate on >+a-!ty #e!2ht
7 One %o'y o" sa!-!n2 te-e6 sh!''!n2 ad!%e
7 Re$a*.B the sh!''!n2 do%+$ent a%%e'ta,-e
7 14 BG M the to' %o'y ) and t*ans'o*t
do%+$ents sent ,y 9HG
!v+ 8B Thanh toRn
8.1 Bhn2 GC .hpn2 h+ n2an21 t*X t!vn n2ay ty
n2Qy %f' Zn S}n STun2 ,!Vn %ho tn2 t*\ 2!R
hU' S]n2
8.0 N2Tu! thr hT^n2 GCB /OGON
INTERNATIONAG CORP. 8( M+2yo 9on21
Ch+n2 A+1 Se+o- 7 /o*ea
8.4 N2n hQn2 thpn2 ,Ro GC B /OREA ;IRST
BAN/
Seo+- 7 /o*ea
8.8 N2n hQn2 $^ GC B DIETCOMBAN/
EIMBAN/
8.( Tthu! hsn $^ GCB t*on2 n2Qy 1()@1@@@
8.< Chxn2 ty thanh toRnB D!`% thanh toRn sW 'hX!
tha% h!`n .h! nhZn STU% nhqn2 %hxn2 ty sa+
SyB
7 04 Zn S}n STun2 ,!Vn 6c' hQn2 hoQn hXo %_
2h! %Td% t*X t*Td%
7 HoR S}n thT}n2 $s! )4 ,Xn
7 Ph!c+ S_n2 2_! hQn2 hoR )4 ,Xn
7 A!fy %hxn2 nhZn 6+ft 6x %hxn2 thT n2+]n
2% do n2Tu! sXn 6+ft %f'
7 A!fy %hxn2 nhZn s -TUn2 %hft -TUn2 %X+
SUDODIN9O
7 MPt ,Xn te-e6 %wa tQ+ v thu! 2!an .h^! hQnh
'h!c+ thpn2 ,Ro 2! hQn2
7NhZn 6{tB %hxn2 ty Zn %h+yVn sW STU% %hf'
nhZn
7 14 ,P Zn S}n STun2 ,!Vn M ,Xn 2%) Q nhqn2
%hxn2 ty Zn tX! STU% 2! Scn ,Nn $+a ,hn2
9HG M thT t% hQnh t*a% t!c' t*ao tay)

2R-ICLE ': (3RCE M2DE0RE VM2D3R
(3RCEW
St*!.e1 sa,ota2e1 #h!%h $ay ,e o%%+*es !n O*!2!n
Co+nt*y sha-- ,e %ons!de*ed as ;o*%e MaCe+*e
!v+ (B Bft .hX .hRn2
[nh %pn21 'hR hos! %_ thV 6Xy *a ^ ,ft %x nTd%
6+ft 6x hQn2 hoR sW STU% 6e$ nhT t*Tun2 hU'
,ft .hX .hRn2
2R-ICLE ,: 2R4I-R2-I3N
<.1 In the e6e%+t!on %o+*se o" th!s %ont*a%t1 a--
d!s'+tes not *ea%h!n2 at a$!%a,-e a2*ee$ent sha--
,e sett-ed ,y the E%ono$!% A*,!t*at!on ,oa*d o"
Ho%h!$!nh C!ty +nde* the *+-es o" the
Inte*nat!ona- Cha$,e* o" Co$$e*%e #hose
a#a*ds sha-- ,e "!na- and ,!nd!n2 ,oth 'a*t!es
<.0 A*,!t*at!on "ee and othe* *e-ated %ha*2es sha--
,e ,o*ne ,y the -os!n2 'a*ty1 +n-ess othe*#!se
a2*eed.
!v+ <B T*~n2 tQ!
<.1 T*on2 >+R t*[nh tha% h!`n hU' S]n2 nQy1 $~!
t*anh %hf' .hpn2 STU% thoX th+Zn hoQ 2!X! sW
'hX! STU% 2!X! >+yct ,hn2 $Pt hP! S]n2 T*~n2
tQ! .!nh tc %wa T' H] Chj M!nh theo nhqn2 -+Zt
-` %wa Phn2 ThT}n2 $s! >+% tc. Q+yct S\nh
%wa HP! S]n2 t*~n2 tQ! .!nh tc sW 'hX! -Q %h+n2
thg$ Q *Qn2 ,+P% %X ha! ,Nn
<.0 G` 'hj t*~n2 tQ! Q nhqn2 %h! 'hj -!Nn h`
.hR% do ,Nn th+a .!`n %h\+1 t*y .h! %_ nhqn2
thoX th+Zn .hR%
2R-ICLE 6: +EN2L-7
=.1 To de-ay sh!'$ent de-ay 'ay$ent
In %ase de-ay sh!'$ent de-ay 'ay$ent ha''ens1
the 'ena-ty "o* de-ay !nte*est #!-- ,e ,ased on
ann+a- *ate 1( 'e*%ent
=.0 To de-ay o'en!n2 GCB
In %ase de-ay o'en!n2 GC ha''ens1 the Se--e* has
the *!2ht to de-ay sh!'$ent
=.4 To %an%e--at!on o" %ont*a%t
I" Se--e* o* B+ye* #ant to %an%e--ed the %ont*a%t1
(n o" the tota- %ont*a%t a-+e #o+-d ,e %ha*2ed
as 'ena-ty to that 'a*ty.
2R-ICLE 8: <ENER2L C3NDI-I3N
8.1 By s!2n!n2 th!s %ont*a%t1 '*e!o+s
%o**es'onden%e and ne2ot!at!ons %onne%ted
he*e#!th sha-- ,e n+-- and o!d
8.0 Th!s %ont*a%t %o$es !nto e""e%t "*o$ s!2n!n2
date1 any a$end$ent and add!t!ona- %-a+se to
these %ond!t!ons sha-- ,e a-!d on-y !" $ade !n
#*!tten "o*$ and d+ty %on"!*$ed ,y ,oth s!des.
8.4 Th!s %ont*a%t !s $ade !n < Enn2-!sh o*!2!na-s1
ea%h s!de .ee's 4.
!v+ =B 'hst
=.1 ! d! !`% 2! hQn2 %hZ$ t* !`% thanh
toRn %hZ$ t* B t*on2 t*Tun2 hU' !`% 2! hQn2
hoz% thanh toRn %hZ$ t* 6Xy *a1 t!vn 'hst do sa
%hZ$ t* 'hX! %h\+ -! sW daa t*Nn -! s+ft hQn2
n$ 1(n
=.0 ! d! !`% %hZ$ t* $^ GCB t*on2 t*Tun2
hU' !`% %hZ$ t* $^ GC 6Xy *a1 ,Nn ,Rn %_
>+yvn 2! hQn2 %hZ$ t*
=.4 H+ ,Y hU' S]n2B
Nc+ ,Nn $+a hoz% ,Nn ,Rn h+ ,Y hU' S]n21 (n
tn2 2!R t*\ hU' S]n2 sW 'hX! STU% tjnh -Q t!vn
'hst %ho ,Nn S_
!v+ 8B !v+ .!`n %h+n2
8.1 Bhn2 !`% .j hU' S]n2 nQy1 nhqn2 n ,Xn
2!ao d\%h Q nhqn2 SQ$ 'hRn t*Td% Sy theo S_
sW .hpn2 %_ 2!R t*\ Q p h!`+
8.0 HU' S]n2 nQy %_ 2!R t*\ .V ty n2Qy .e1 $~!
S!v+ .hoXn sa S! , s+n2 %ho nhqn2 S!v+ .!`n
nQy sW %h %_ 2!R t*\ .h! STU% tha% h!`n ,hn2 n
,Xn Q n2ha r STU% 0 ,Nn 6R% nhZn
8.4 HU' S]n2 nQy STU% -Z' thQnh )< ,Xn 2%
,hn2 t!cn2 Anh1 $! ,Nn 2!q )4 ,Xn
Contrat for ferti#i?er
No: @1-9*A B7C- 24C
9ateB Se'. )= 1@@@
Bet#eenB ..............
Add*essB.............
Te-B
Te-e6B................;a6B................
Re'*esented ,y M*................. He*e!na"te* %a--ed The B+ye*
AndB ................
Add*essB.............
Te-B......................
Te-e6B...................;a6B................... Re'*esented ,y M*........... He*e!na"te* %a--ed The Se--e*
It !s $+t+a--y a2*eed ,et#een ,oth s!des to s!2n th!s %ont*a%t #!th te*$s and s'e%!"!%at!ons
s'e%!"!ed he*e+nde*B
2R-ICLE 1: C3MM3DI-7 ! 1+ECI(IC2-I3N
1.1 Co$$od!tyB UREA ;ERTIGIER
1.0 O*!2!nB IN9ONESIA
1.4 S'e%!"!%at!onB 7 N!t*o2enB 8<n $!n.
7 Mo!st+*eB ).(n $a6.
7 B!+*etB 1.)n $a6.
7 Co-o*B Wh!te
7 ;*ee "-o#!n2B t*eated #!th Ant!7 Ca.!n2
1.8 Pa%.!n2B 7 () .2 net !n Po-y'*o'y-en Woen ,a2 #!th 'o-ythy-ene !nne* -!ne* 7 0n o" tota-
,a2 as e$'ty s'a*e ,a2s to ,e s+''-!ed "*ee o" %ha*2e
2R-ICLE %: 0NI- +RICE - /02N-I-7 ! -3-2L 2M30N-
0.1 Un!t '*!%eB US9 1=8 MT CL; Ho%h!$!nh C!ty Po*t
0.0 Q+ant!tyB 1)1))) MT M '-+s o* $!n+s 1)n at se--e*Hs o't!on)
0.4 Tota- a$o+ntB US9 11=8)1))) M7 1)n at se--e*Hs o't!on)
SayB US 9o--a*s one $!--!on seen h+nd*ed e!2hty tho+sand.
2R-ICLE *: 15I+MEN- - DELI>ER7
4.1 T!$e o" sh!'$entB not -ate* than Se'te$,e* 1@@4
4.0 Po*t o" -oad!n2B Indones!a $a!n 'o*ts
4.4 9est!nat!on 'o*tB Ho%h!$!nh C!ty Po*t
4.8 Not!%e o" sh!'$entB
W!th!n 0 days a"te* the sa!-!n2 date o" %a**y!n2 esse- to S.R D!etna$1 the Se--e* sha-- not!"y ,y
%a,-e to the B+ye* the "o--o#!n2 !n"o*$at!onB
GC n+$,e*
A$o+nt
Na$e and nat!ona-!ty o" the esse-
B!-- o" Gad!n2 n+$,e* date
Po*t o" -oad!n2
9ate o" sh!'$ent
E6'e%ted date o" a**!a- at d!s%ha*2!n2 'o*t
4.( Sh!''!n2 $a*.B
UREA
8<n NITROAEN MINIMUM
1n BIURET MAIMUM
).(n MOISTURE MAIMUM
() /AS NET
USE NO HOO/S
MA9E IN IN9ONESIA
One s!de '*!nted !n 2*een %o-o*
4.< 9!s%ha*2!n2 te*$sB
When Not!%e o" Read!ness tende*ed ,e"o*e noon1 -ayt!$e sha-- ,e %o$$en%ed "*o$ 14B)) on
the sa$e date1
7 When Not!%e o" Read!ness tende*ed a"te*noon1 -ayt!$e sha-- ,e %o$$en%ed "*o$ 8B)) on
ne6t date
4.= 9!s%ha*2!n2 te*$B @))MT day WW9SHE EIU
9e$ 9esB US9 01))) ha-"
2R-ICLE 4: +27MEN-
8.1 By !**eo%a,-e Gette* o" C*ed!t at s!2ht "o*n BG date "o* the "+-- a$o+nt o" the %onnt*a%t
a-+e
8.0 GC Bene"!%!a*yB /OGON INTERNATIONAG CORP.
8( M+2yo7 9on21 Ch+n2 A+1 Seo+- 7 /o*ea
8.4 GC ad!s!n2 Ban.B /OREA ;IRST BAN/
Seo+- 7 /o*ea
8.8 Ban. o" O'en!n2 GCB DIETCOMBAN/ EIMBAN/
8.( T!$e o" o'en!n2 GCB #!th!n Se'. 1( 1@@@
8.< Pay$ent do%+$entsB
Pay$ent sha-- ,e $ade +'on *e%e!'t o" the "o--o#!n2 do%+$entsB
7 44 o" %-ean on ,oa*d B!-- o" Gad!n2 $a*.ed ;REIAHT PREPAI9
7 Co$$e*%!a- !no!%e !n t*!'-!%ate
7 Pa%.!n2 -!st !n t*!'-!%ate
7 Ce*t!"!%ate o" o*!2!n !ss+ed ,y $an+"at+*e*
7 SUCO;IN9OHs Ce*t!"!%ate on >+a-!ty #e!2ht
7 One %o'y o" sa!-!n2 te-e6 sh!''!n2 ad!%e
7 Re$a*.B the sh!''!n2 do%+$ent a%%e'ta,-e
7 14 BG M the to' %o'y ) and t*ans'o*t do%+$ents sent ,y 9HG
2R-ICLE ': (3RCE M2DE0RE
St*!.e1 sa,ota2e1 #h!%h $ay ,e o%%+*es !n O*!2!n Co+nt*y sha-- ,e %ons!de*ed as ;o*%e
MaCe+*e
2R-ICLE ,: 2R4I-R2-I3N
<.1 In the e6e%+t!on %o+*se o" th!s %ont*a%t1 a-- d!s'+tes not *ea%h!n2 at a$!%a,-e a2*ee$ent
sha-- ,e sett-ed ,y the E%ono$!% A*,!t*at!on ,oa*d o" Ho%h!$!nh C!ty +nde* the *+-es o" the
Inte*nat!ona- Cha$,e* o" Co$$e*%e #hose a#a*ds sha-- ,e "!na- and ,!nd!n2 ,oth 'a*t!es
<.0 A*,!t*at!on "ee and othe* *e-ated %ha*2es sha-- ,e ,o*ne ,y the -os!n2 'a*ty1 +n-ess
othe*#!se a2*eed.
2R-ICLE 6: +EN2L-7
=.1 To de-ay sh!'$ent de-ay 'ay$ent
In %ase de-ay sh!'$ent de-ay 'ay$ent ha''ens1 the 'ena-ty "o* de-ay !nte*est #!-- ,e ,ased on
ann+a- *ate 1( 'e*%ent
=.0 To de-ay o'en!n2 GCB
In %ase de-ay o'en!n2 GC ha''ens1 the Se--e* has the *!2ht to de-ay sh!'$ent
=.4 To %an%e--at!on o" %ont*a%t
I" Se--e* o* B+ye* #ant to %an%e--ed the %ont*a%t1 (n o" the tota- %ont*a%t a-+e #o+-d ,e
%ha*2ed as 'ena-ty to that 'a*ty.
2R-ICLE 8: <ENER2L C3NDI-I3N
8.1 By s!2n!n2 th!s %ont*a%t1 '*e!o+s %o**es'onden%e and ne2ot!at!ons %onne%ted he*e#!th
sha-- ,e n+-- and o!d
8.0 Th!s %ont*a%t %o$es !nto e""e%t "*o$ s!2n!n2 date1 any a$end$ent and add!t!ona- %-a+se to
these %ond!t!ons sha-- ,e a-!d on-y !" $ade !n #*!tten "o*$ and d+ty %on"!*$ed ,y ,oth s!des.
8.4 Th!s %ont*a%t !s $ade !n < Enn2-!sh o*!2!na-s1 ea%h s!de .ee's 4.
;OR THE BU:ER ;OR THE SEGGER
HU' S]n2 'hn ,_n M,Xn t!cn2 D!`t)
5Ep FGng p.Hn "In
1J: @1-9*AB7C- 24C
N2Qy 14)81@@@
A!qaB..........
\a %hB.....
!`n thos!B.........
Te-e6B...........;a6B.........
9o pn2 ................ -Q$ Ss! d!`n
9Td! Sy 2~! -Q BNn M+a
DQB.................................
\a %hB.................
!`n thos!B...............
Te-e6B.................. ;a6B................
9o n2 ..................... -Q$ Ss! d!`n
9Td! Sy 2~! -Q B BNn BRn
5ai "Kn t.oL t.9Mn kN .Ep FGng &Oi n.Png FiQ9 kiRn &S 89i T. FUE nK9 ra =UOi FH$:
XiQ9 1: 5Sng .oT &S 89$ T. kY t.9Mt
1.1 TNn hQn2B Phn +*N
1.0 N2+]n 2%B Indones!a
1.4 Q+! %R%h . th+ZtB
7 N!t*o2en M Ss$) B 8<n t! th!V+
7 $ SPB )1(n t! Sa
7 B!+*etB 11)n t! Sa
7 MQ+ sO%B t*On2
7 Hst *u!B STU% 6 -j ,hn2 Ant!7 Ca.!n2
1.8 _n2 2_!B () .2 .hpn2 .V ,ao PP %_ -d' t*on2 ,hn2 PE 0n tn2 s ,ao dn2 -Q$ ,ao da
'hn2 M ,ao .hpn2) STU% %+n2 %f' $!n 'hj
!v+ 0B }n 2!R7 S -TUn2 7 Tn2 2!R t*\
0.1 }n 2!RB 1=81)) US9 MT CL; %Xn2 H] Chj M!nh
0.0 S -TUn2B 1).))) MT M7 1)n t+ theo -aa %h~n %wa ,Nn BRn)
0.4 Tn2 t*\ 2!RB 1.=8).))) US9 M 7 1)n t+ theo -aa %h~n %wa BNn BRn)
Ah! ,hn2 %hqB MPt t*!`+ ,Xy t*$ tR$ $T}! n2Qn US9
!v+ 4B A! Q 2!ao hQn2
4.1 Thu! 2!an 2! hQn2B .hpn2 t* h}n thRn2 @ n$ 1@@@
4.0 CXn2 ,% hQn2B nhqn2 %Xn2 %hjnh ^ Indones!a
4.4 CXn2 ScnB CXn2 t' H] Chj M!nh
4.8 Thpn2 ,Ro 2! hQn2B
T*on2 n2 )0 n2Qy sa+ n2Qy .h^! hQnh %wa tQ+ Zn tX! Scn nTd% CHHCN D!`t Na$1 ,Nn
BRn sW 'hX! thpn2 ,Ro %ho ,Nn M+a ,hn2 S!`n tjn nhqn2 thpn2 t!n sa+ SyB
GC s...
A!R t*\
TNn Q >+% t\%h tQ+
CXn2 ,% hQn2
N2Qy 2! hQn2
N2Qy da .!cn tQ+ Scn ^ %Xn2 db hQn2
4.( /j $ h!`+ Zn tX!B .j $ h!`+ %wa ,Nn BRn
4.< Nhqn2 S!v+ .!`n db hQn2B .h! thpn2 ,Ro sn sQn2 STU% 2! td! t*Td% 01B)) 2!u t*Ta1 thu!
2!an db hQn2 ,Ot S|+ ty 14B)) 2!u %n2 n2Qy. /h! thpn2 ,Ro sn sQn2 db hQn2 STU% 2! td! Qo ,+!
%h!v+1 thu! 2!an db hQn2 sW ,Ot S|+ ty 8B)) 2!u sRn2 %wa n2Qy hp$ sa+
4.= !v+ .!`n db hQn2B @)) MT n2Qy M EE9SHESEIU) n2Qy -Q$ !`% tt t*u! .hpn2 .V %hw
nhZt Q n2Qy - .hpn2 STU% tjnh .V %X .h! s drn2
T!vn 'hst t!vn thT^n2B 0 ))) US91))) US9
!v+ 8B Thanh toRn
8.1 Bhn2 GC .hpn2 h+ n2an21 t*X t!vn n2ay ty n2Qy %f' Zn S}n STun2 ,!Vn %ho tn2 t*\ 2!R
hU' S]n2
8.0 N2Tu! thr hT^n2 GCB /OGON INTERNATIONAG CORP.
8( M+2yo 9on21 Ch+n2 A+1 Se+o- 7 /o*ea
8.4 N2n hQn2 thpn2 ,Ro GC B /OREA ;IRST BAN/
Seo+- 7 /o*ea
8.8 N2n hQn2 $^ GC B DIETCOMBAN/ EIMBAN/
8.( Tthu! hsn $^ GCB t*on2 n2Qy 1()@1@@@
8.< Chxn2 ty thanh toRnB D!`% thanh toRn sW 'hX! tha% h!`n .h! nhZn STU% nhqn2 %hxn2 ty sa+
SyB
7 44 Zn S}n STun2 ,!Vn 6c' hQn2 hoQn hXo %_ 2h! %Td% t*X t*Td%
7 HoR S}n thT}n2 $s! )4 ,Xn
7 Ph!c+ S_n2 2_! hQn2 hoR )4 ,Xn
7 A!fy %hxn2 nhZn 6+ft 6x do n2Tu! sXn 6+ft %f'
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7 14 ,P Zn S}n STun2 ,!Vn M ,Xn 2%) Q nhqn2 %hxn2 ty Zn tX! STU% 2! Scn ,Nn $+a ,hn2
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s! d!`n ,Nn $+a s! d!`n ,Nn ,Rn
<-1D
%. Exporting - :.ere are t.e RisksZ
THE PROBLEM
What *!s.s "a%e the e6'o*te* ,eyond the *!s.s o" do!n2 no*$a- -o%a- ,+s!ness& And #hat sa"e2+a*ds
e6!st 7 to '*ote%t the e6'o*te*Hs !nte*ests&
THE PRINIPLE
E6'o*t!n2 %*eates *!s.s "o* ee*yone !no-edB 2oe*n$ents1 e6'o*te*s and ,+ye*s a-!.e. ;o* the
e6'o*te*1 non7'ay$ent !s the $aCo* *!s.B !ns+*an%e. a ,an. 2+a*antee o*1 $ost ,ene"!%!a--y1 a -ette* o"
%*ed!t o""e* '*ote%!!on. P*o,-e$s !n $a.!n2 de-!e*y a*e ,est ta%.-ed ,y a2*ee$ents ta!-o*ed to the
e6'o*te*Hs needs.
IN MORE DEPTH
In ee*y e6'o*t dea-1 the*e a*e "o+* '*!n%!'a- 'a*t!esB the e6'o*te*1 the !$'o*te*1 and the 2oe*n$ents
o" the t#o %o+nt*!es !no-ed. Ea%h 'a*ty "a%es a se*!es o" *!s.s and sho+-d ta.e '*ote%t!e $eas+*es.
Aoe*n$entB The 2oe*n$ent *e'*esents the !nte*ests o" !ts 'eo'-e. These !nte*ests do not a-#ays
%o!n%!de #!th the !nte*ests o" an e6'o*te* #ho #ants to $a6!$!Ee '*o"!t. A-- %o+nt*!es ta.e $eas+*es
to '*ote%t #hat they see as the!* ,est !nte*ests. One o,!o+s e6a$'-e !s the t*ade !n #ea'onsB
%o+nt*!es s+%h as Ae*$any st*!%t-y %ont*o- the e6'o*t o" #ea'ons to a*eas o" 'otent!a- %on"-!%ts1
!nte*nat!ona- a*$s e$,a*2oes a2a!nst %o+nt*!es 'e*%e!ed as a22*ess!e a*e %o$$on.
8
In s+%h a %ase1
the th*eat to the nat!ona- !nte*est !s o,!o+s. S!$!-a*!y1 !n t!$e o" "a$!ne1 a 2oe*n$ent no*$a--y
'*oh!,!ts the e6'o*t o" "oodl*e2a*d-ess o" the 'otent!a- '*o"!ts o" an e6'o*te*.
;o*e!2n e6%han2e !s anothe* a*ea #he*e sho*ta2es o"ten o%%+* and #he*e 2oe*n$ents a%t to
'*ote%t the !nte*ests o" the %o+nt*y at -a*2e. Whe*e a 2oe*n$ent sees a *!s.1 !t has -!tt-e %ho!%e
,+t ta.e a%t!on to '*ote%t the %o+nt*y. The e6'o*t -!%ense1 'hytosan!*a*y %e*t!"!%ate1 %e*t!"!%ate o"
o*!2!n1 and $any s!$!-a* do%+$ents a*e the d!*e%t *es+-t. And 2oe*n$ents not on-y *est*!%tm they
a-so '*o$ote #!th d!*e%t !n%ent!e1 ta6 %*ed!ts1 *etent!on s%he$es1 and so on. In '*a%t!%e1 the
!nd!!d+a- e6'o*te* %an do -!tt-e to !n"-+en%e 2oe*n$ent 'o-!%y o* to a-te* '+,-!% -a#1 the
!nst*+$ent that the 2oe*n$ent +ses to e6'*ess !ts #!--. In *e2+-at!n2 the *e-at!ons ,et#een
the$se-es1 ho#ee*1 the e6'o*te* and the !$'o*te* hae a 2*eat dea- o" "*eedo$m '*o"!ta,-e +se
o" th!s "*eedo$ !s1 !n e""e%t1 the s+,Ce%t o" th!s ,oo..
-.e Exporter
;o* the e6'o*te*1 ee*y dea- 'oses *!s.s. The $ost o,!o+s *!s. !s the *!s. o" non7'ay$entl#hat
ha''ens !" the 2oods a*e de-!e*ed ,+t the ,+ye* "a!-s to 'ay& Th!s !s a *!s. !n ee*y .!nd o"
,+s!ness1 ,+t !t !s 'a*t!%+-a*-y a%+te !n e6'o*t!n2B the ,+ye* !s a -on2 #ay o""m he %an $a.e e6%+ses
that a*e d!""!%+-t to %he%..
777777777777777777777777777777777777777777777777777777
8
Unt!- ea*-y 1@@81 the %o+nt*!es !n the 5#este*n a--!an%e? +sed the COCOM MCoo*d!nat!n2
Co$$!ttee on M+-t!-ate*a- E6'o*t Cont*o-s) *+-es to %ont*o- the e6'o*t o" #ea'ons o* st*ate2!%
e>+!'$ent s+%h as %o$'+te*s to the Wa*sa# Pa%t %o+nt*!es.
So$e ty'!%a- e6a$'-esB
7 The 2oods nee* a**!edm
7 The 2oods a**!ed da$a2edm
7 The %ent*a- ,an. has no "o*e!2n e6%han2e to $a.e 'ay$entm
7 A 2oe*n$ent *e2+-at!on $a.es 'ay$ent !$'oss!,-e.
O* he %an s!$'-y d!sa''ea*. A-$ost as da$a2!n2 as non7'ay$ent !s -ate 'ay$entB !"1 as so$et!$es
ha''ens1 the e6'o*te* ho'es "o* 'ay$ent #!th!n th!*ty days ,+t !s not 'a!d "o* e!2hteen $onths1 then
$oney $+st ,e ,o**o#ed "*o$ the ,an.B an e6'e%ted '*o"!t %an an!sh !n a $atte* o" #ee.s.
And the*e a*e othe* '*o,-e$s too. The %*+%!a- $o$ent "o* the e6'o*te* !n any dea- !s the $o$ent
o" de-!e*yB as soon as de-!e*y has s+%%ess"+--y ta.en '-a%e1 the e6'o*te*Hs $a!n d+t!es a*e
d!s%ha*2ed and the *!2ht to %o--e%t 'ay$ent ta.es e""e%t. B+t $any th!n2s %an de-ay de-!e*y. ;o*
an e6a$'-e1 -etHs 2o ,a%. to the O""!%e Ente*'*!ses dea-B A-e% Pate- !s se--!n2 %ha!*s $ade !n
De*,ena to a %o$'any !n Es'e*anEa. De*,ena !s an !s-and1 so the %ha!*s $+st 2o ,y sea. Who !s
*es'ons!,-e "o* o*2an!E!n2 t*ans'o*t& I" #e ass+$e that Pate- and Ao$eE a2*eed ;OB de-!e*y
(
1
then the ,+ye*1 Ao$eE1 $+st no$!nate a sh!' and Pate- $+st -oad the 2oods on ,oa*d. B+t #hat
!" the e6'e%ted sh!' "a!-s to a**!e& The %ha!*s #!-- stand at the do%.s1 *ott!n2 and *+st!n21 ea*n!n2
noth!n21 een tho+2h Pate- $+st 'ay to h!s s+''-!e*s the $oney he s'ent !n $an+"a%t+*!n2 the
%ha!*s. A -on2 de-ay #!-- h+*t h!$ "!nan%!a--y.

Ho# %an the e6'o*te* '*ote%t h!$se-"& The $ost o,!o+s %o+*se !s to dea- on-y #!th t*ad!n2
'a*tne*Hs #ho a*e .no#n to ,e t*+st#o*thyland so-ent. Un"o*t+nate-y th!s st*ate2y !s not
a-#ays '*a%t!%a,-e1 !n 'a*t!%+-a*1 the "!*st ,+s!ness #!th a ne# 'a*tne* !s a-#ays *!s.y. T#o
a-+a,-e $e%han!s$s1 ho#ee*1 '*ote%t the e6'o*te* a2a!nst the *!s. o" non7'ay$entB th!*d7
'any se%+*!ty and the -ette* o" %*ed!t.
-.ir=-+art$ 1e9rit$
The e6'o*te* %an o"ten se%+*e a '*o$!se "*o$ a th!*d 'a*ty that !" the ,+ye* "a!-s to 'ay1 the !no!%e
#!-- ,e 'a!d any#ay. S+%h a '*o$!se $ay ,e 2!en ,y an !ns+*an%e %o$'anyl!n th!s %ase the
e6'o*te* ta.es o+t an e6'o*t %*ed!t !ns+*an%e 'o-!%y to %oe* the 2*eate* 'a*t o" the *!s..
Un"o*t+nate-y1 ho#ee*1 th!s .!nd o" !ns+*an%e !s not aa!-a,-e !n a-- %o+nt*!es. A-te*nat!e-y1 the
'*o$!se !s 2!en ,y a ,an. !n the "o*$ o" a ,an. 2+a*anteelthe ,+ye*Hs ,an. 2+a*antees that !" the
,+ye* "a!-s to 'ay1 the ,an. #!-- 'ay !nstead. The d!sadanta2es he*e a*e that s+%h 2+a*antees a*e
e6'ens!e and that ,+ye*s a*e *e-+%tant to esta,-!sh the$.
Letter of Credit
A -ette* o" %*ed!t1 !" the te*$s a*e '*o'e*-y ne2ot!ated1 ens+*es 'ay$ent on de-!e*y o" the
2oods. As soon as the 2oods a*e sh!''ed1 the e6'o*te* ta.es the sh!''!n2 do%+$ents to an
a2*eed ,an.1 o"ten !n h!s ne!2h,o*hood. I" the sh!''!n2 do%+$ents a*e !n o*de*1 the ,an. 'ays
the a2*eed s+$ !$$ed!ate-y. The -ette* o" %*ed!t !s o,!o+s-y an !dea- a**an2e$ent "o* the
e6'o*te*1 and !t !s the ,as!s o" $ost e6'o*t t*ade a*o+nd the #o*-d.
B+t #hat a,o+t the othe* *!s.s1 the "a!-+*e o" the sh!' to a**!e #h!%h #e $ent!oned ea*-!e*1 o*
+n*easona,-e %o$'-a!nts $ade ,y the ,+ye* #hen he "!na--y *e%e!es the 2oods& Be"o*e as.!n2 ho#
e6'o*te*s '*ote%t the$se-es !n s+%h %ases1 -et +s -oo. at the *!s.s "a%ed ,y the ,+ye*lthe !$'o*te*.
-.e Importer
aveat emptor !s an o-d '*!n%!'-e o" -a#B b!yer be"are. Th!s !s easy eno+2h !n a e2eta,-e $a*.et o*
#hen one !s ,+y!n2 a +sed %a*1 ,+t !nte*nat!ona--y !t !s d!""!%+-t "o* the ,+ye* to ,e s+""!%!ent-y #a*y.
The dan2e*s a*e o,!o+sB -ate de-!e*y o" the 2oods1 de-!e*y o" 2oods that a*e !nade>+ate !n >+ant!ty
o* !n >+a-!ty1 "a!-+*e ,y the e6'o*te* to $a.e ne%essa*y *e'a!*s o* to s+''-y s'a*e 'a*ts #hen th!n2s
2o #*on2. Ho# !s the ,+ye* to -!$!t s+%h *!s.s #hen h!s ,est #ea'on *e"+sa- to 'ayl!s ta.en o+t o"
h!s hands1 !n $ost %ases1 ,y the $e%han!s$ o" the -ette* o" %*ed!t.
7777777777777777777777777777777777777777777777777777777777777777777777777777
(
;OB ;*ee on ,oa*d de-!e*y $eans de-!e*y ta.es '-a%e #hen the 2oods 5%*oss the sh!'3s *a!-.?
;o* "+-- deta!-s o" ;OB and othe* te*$s o" t*ade1 see Cha'te* 11 se%t!on < ,e-o#.
In so$e %ases1 !n 'a*t!%+-a* #hen '+*%has!n2 %a'!ta- e>+!'$ent1 the ,+ye* as.s "o* a
per#ormance $!arantee. G!.e the 'ay$ent 2+a*antee1 th!s !s a '*o$!se $ade ,y a ,an.l!n th!s
%ase tho+2h1 !t !s a '*o$!se to %o$'ensate the ,+ye* !" e>+!'$ent "a!-s to "+n%t!on as s'e%!"!ed.
Anothe* sa"e2+a*d !s the retention. I" 2oods a*e de-!e*ed s+,Ce%t to a #a**anty 'e*!od o"1 say.
s!6 $onths1 $any ,+ye*s as. "o* a *etent!onB they *eta!n 'e*ha's %& o" the %ont*a%t '*!%e +nt!-
the 2oods a*e no -on2e* +nde* #a**antyB they "!na--y 'ay th!s %& ,+t on-y !" no #a**anty
%-a!$s a*e !n the '!'e-!ne. Ho#ee*1 ne!the* the 2+a*antee no* the *etent!on !s %o$$on !n
s!$'-e a2*ee$ents "o* the e6'o*t o" 2oods. The*e has to ,e so$eth!n2 $o*e. The ans#e* -!es1
as #e sha-- see !n the ne6t se%t!on1 !n the %ont*a%t and !n the -a# the '*!ate -a# that
s+''-e$ents the a2*ee$ent ,et#een the 'a*t!es.
C21E 1-0D7
2 RI1;7 401INE11
De*,ena /n!ts e6'o*t s#eate*s and othe* t*ad!t!ona- .n!t#ea* $ade o" synthet!% "!,e*s. An !$'o*te*
"*o$ Es'e*anEa %ont*a%ts #!th De*,ena /n!ts "o* a %ons!2n$ent o" '+--oe*s. The o*de* !s -a*2eB
a,o+t 10n o" De*,ena /n!ts ann+a- t+*noe*. Te*$sB
- Pay$ent ,y %on"!*$ed1 !**eo%a,-e1 at7s!2ht -ette* o" %*ed!tm
- Gette* o" %*ed!t to ,e o'ened "o+* #ee.s ,e"o*e de-!e*y d+e
- 9e-!e*yB ;OB Po*t De*,ena
- 9e-!e*y dateB 8 #ee.s a"te* s!2n!n2 %ont*a%t MMan+"a%t+*e ta.es 8 #ee.s.)
- 9e"e%ts -!a,!-!ty 'e*!od M#a**anty)B < $onths "*o$ a%%e'tan%e ,y ,+ye*.
Be-o# !s a s%hed+-e o" eents d+*!n2 %ont*a%t 'e*"o*$an%e. At ea%h sta2e the*e !s so$e *!s. to
De*,ena /n!ts. State the *!s. and then ea-+ate !ts se*!o+sness !n ea%h %ase.
1tep 1: 3r=ering Ra) Materia#s
A -o%a- s+''-!e* has ,een o*de*ed to '*o!de De*,ena #!th ne%essa*y $ate*!a-s.
The *!s.B ................................................................................................
SERIOUS MO9ERATE NEAGIAIBGE
1tep %: Man9fat9re an= =e#i&er$
De*,ena /n!ts $an+"a%t+*es the 2oods and de-!e*s the$ to the sh!'.
The *!s.B ................................................................................................
SERIOUS MO9ERATE NEAGIAIBGE
1tep *: Co##etion of t.e #etter of re=it
De*,ena /n!ts '*esents the sh!''!n2 do%+$ents to the ,an. and as.s$an+"a%t+*es the 2oods and
de-!e*s the$ to the sh!'.
The *!s.B ................................................................................................
SERIOUS MO9ERATE NEAGIAIBGE
1tep 4: 3pen +akage Inspetion an= :arrant$ +erio=
De*,ena /n!ts !ns'e%ts the 2oods on the!* a**!a- !n Es'e*anEa. Then the de"e%ts -!a,!-!ty 'e*!od
,e2!ns.
The *!s.B ................................................................................................
SERIOUS MO9ERATE NEAGIAIBGE
Ste' 1B De*,ena .n!ts has o*de*ed $ate*!a-s ,e"o*e the -ette* o" %*ed!t !s o'en. I" the -ette* o"
%*ed!t !s not o'ened o* !" o'en!n2 !s de-ayed1 De*,ena /n!ts #!-- hae +nne%essa*y *a#
$ate*!a-s on !ts hands. Th!s %o+-d ,e e6'ens!e. R!s. se*!o+s.
Ste' 0B Unt!- he has %o--e%ted 'ay$ent1 the se--e* a-#ays *+ns the *!s. o" non7'ay$ent.
Ho#ee*1 #!th the -ette* o" %*ed!t $e%han!s$1 th!s *!s. !s s$a--. R!s.7 ne2-!,!,-e.
Ste' 4B Ee*yth!n2 no# de'ends on the %o**e%tness o" sh!''!n2 do%+$ents. I" the se--e* has
%o**e%t do%+$ents1 he #!-- a-$ost %e*ta!n-y 'a!d. B+t $any se--e*s '*esent !n%o**e%t
do%+$ents to the ,an.. R!s.7Mode*ate
Ste' 8B A2a!n ee*yth!n2 de'ends on ho# #e-- the se--e* has done h!s Co,. Co**e%t 2oods #!--
,e a%%e'ted. Een so1 o'en 'a%.a2e !ns'e%t!on !s a d!""!%+-t t!$e "o* the se--e* !" the ,+ye* has
%han2ed h!s $!nd a,o+t the o*de*1 th!s !s #hen he t*!es to $a.e t*o+,-e. R!s. Mode*ate.
-rans#ate into >ietnamese
Contrat for Ne)sprinting paper
Contrat V No %@' -LW
Bet#eenB
D!etna$ S%!ent!"!%7 P*od+%t!on Un!on o"
Aeodesy and Ca*to2*ah'y
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Te-B 80.88<80@ Te-e6B 0@888= D!et%o DT
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Ca,-e add*essB TWOHAN9CO1 SEOUG1
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He*e!na"te* %a--ed Se--e*
It has ,een a2*eed that B+ye* ,+ys and Se--e*
se--s on the te*$s and %ond!t!ons as "o--o#sB
!`n thos!B 80.88<80@
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;a6B 88787(<88<
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2R-ICLE 1: DE1CRI+-I3N -
1+ECI(IC2-I3N- /02LI-7- /02N-I-7
1. 9es%*!'t!onB NEWSPRINTINA PAPER
0. Co+nt*y o" o*!2!nB CHINA
4. Ma.e*Hs na$eB
8. Q+a-!ty S'e%!"!%at!onB S+,stan%eB 8@ 7
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<. Pa%.!n2B EPORT STAN9AR9
=. Ma*.!n2B
S+,stan%eB 8@ 2$0 70
9est!nat!onB Ha!'hon2 Po*t
8. 9est!nat!onB
HAIPHONA PORT
2R-ICLE II: +RICE
P*!%e to ,e +nde*stood CI; Ha! Phon2 'o*t
!n%-+d!n2 Sea#o*thy 'a%.!n2
Un!t '*!%eB US9 (4(MT
Tota- a$o+ntB US9 1)=1))).))
SayB Un!ted States 9o--a* one h+nd*ed and
seen tho+sand on-y
2R-ICLE III: DELI>ER7 -IME
8) days a"te* GC *e%e!ed
2R-ICLE I>: +27MEN-
By !**eo%a,-e Gette* o" C*ed!t !n U.S
9o--a* #!th!n 18) days #!th ).8n o" d!!dend
M !n "ao+* o" ) ea%h the Se--e* and 'aya,-e and
'aya,-e on '*esentat!on to the Ban. "o* ;o*e!2n
T*ade o" D!etna$ o" the "o--o#!n2 do%+$ents1
ea%h !n th*ee %o'!esB
7 C-ean on ,oa*d B!-- o" Gad!n2
7 Co$$e*%!a- Ino!%e
7 Ce*t!"!%ate o" #e!2ht ando* >+ant!ty
7 Ce*t!"!%ate o" Q+ant!ty !ss+ed ,y the
Se--e* ando* the Ma.e*
7 Ce*t!"!%ate o" O*!2!n !ss+ed ,y Cha$,e*
o" Co$$e*%e ando* the Se--e*
7 Ins+*an%e Po-!%y
7 Re%e!'t o" Sh!'$aste* a%.no#-ed2!n2 !t
d+-y ha!n2 *e%e!ed 4 sets o" non7 ne2ot!at!on
sh!''!n2 do%+$ents as a,oe $ent!oned
fiQ9 1: Mgt .Sng, 89$ T., .bt #UEng
&S sJ #UEng
1. Mzt hQn2B A!fy !n ,Ro
0. NTd% 6+ft 6xB T*+n2 Q+%
4. TNn n2Tu! sXn 6+ftB
8B Chft -TUn2 Q >+! %R%hB \nh -TUn2 8@
7 0 2a$$0
C+Pn .h *Pn2 =8= $$
(. S -TUn2B 0)) MT M tfn ${t) 7 (n
<. _n2 2_!B Sst t!N+ %h+gn 6+ft .hg+
=. /j $ h!`+B S+,stan%eB 8@ 2$0 70
9est!nat!onB Ha!'hon2 Po*t
8. CXn2 ScnB CXn2 HX! Phn2
fiQ9 %: <iT L
A!R CI; %Xn2 HX! Phn2 ,ao 2]$ %X t!vn
,ao ,[ S_n2 2_! %_ thV S! ,!Vn STU%
}n 2!RB US9 (4(MT
Tn2 t*\ 2!RB 1)=.)))1))US9
Bhn2 %hqB MPt t*$ -!nh ,Xy n2h[n p-a
M %hn
fiQ9 *: -.hi gian giao .Sng
8) n2Qy sa+ .h! nhZn STU% thT tjn drn2
MGC)
fiQ9 4: -.an. toTn
Bhn2 thT tjn drn2 .hpn2 h+ n2an2 t*X
,hn2 p-a M t*on2 n2 18) n2Qy d! )18n
t!vn -! %ho n2Tu! BRn .h! 6+ft t*[nh d! N2n
hQn2 N2os! thT}n2 D!`t Na$ ,P %hxn2 ty sa+1
$! -os! ,a ,XnB
7 DZn S}n ss%h S 6c' hQn2
7 HoR S}n thT}n2 $s!
7 A!fy %hxn2 nhZn t*~n2 -TUn2 Qhoz% s
-TUn2
7 A!fy %hxn2 nhZn do n2Tu! BRn Qhoz%
n2Tu! sXn 6+ft %f'
7 A!fy %hxn2 nhZn 6+ft 6x do Phn2
ThT}n2 $s! hoz% do n2Tu! BRn %f'
7 A!fy %hxn2 nhZn ,Xo h!V$
7 B!Nn -a! %wa th+yvn t*T^n2 thpn2 ,Ro S
nhZn STU% 4 ,P %hxn2 ty 2! hQn2 .hpn2 %h+yVn
nhTUn2 STU% nhT S nN+ t*Nn GC STU% $^ %_
2!R t*\ t*on2 n2 1( n2Qy sa+ .h! 6c' hQn2.
7 Gette* o" C*ed!t #!-- ,e a-!d "o* 1( days
a"te* -oad!n2 %o$'-eted. The B+ye* and the S--e*
#!-- ,ea* ,an. %ha*2es !n the!* *es'e%t!e %o+nt*y
,+t %ha*2es "o* a$end$ent o* e6tens!on o" GC
#!-- ,e ,o*ne ,y 'a*ty that *e>+!*es.
N2Tu! BRn Q n2Tu! M+a sW %h\+ %h! 'hj n2n
hQn2 tT}n2 xn2 ^ nTd% $[nh1 %h! 'hj sa S!
hoz% 2!a hsn GC theo yN+ %|+ %wa ,Nn nQo th[
,Nn fy %h\+
2R-ICLE >: IN10R2NCE A
15I+MEN-
1. Ins+*an%e B
Ins+*an%e "o* the %ont*a%ted 2oods #!-- ,e
%oe*ed ,y the Se--e* ,y A-- R!s. Po-!%y
0. Not!%e o" sh!'$entB
7 P*e7 ad!%e o" sh!'$entB Be"o*e sh!'$ent
o" the 2oods the Se--e* sha-- ad!%e ,y %a,-ete-e6
the B+ye* o" est!$ated t!$e o" sh!'$ent and
na$e o" %a**y!n2 esse-
7 ;!na- ad!%e o" sh!'$entB #!th!n 08 ho+*s
a"te* sh!'$ent the Se--e* sha-- ad!%e ,y
%a,-ete-e6 B Cont*a%t No1 >+ant!ty1 2*oss #e!2ht1
net #e!2ht1 $eas+*e$ent1 n+$,e* o" 'a%.a2es1
!no!%e a-+e1 na$e o" %a**y!n2 esse-1 B!-- o"
Gad!n2 n+$,e*1 sa!-!n2 date "o* !ns+*an%e
'+*'ose
2R-ICLE >I: +3R- 3( DIC52R<E
2ND IN1+EC-I3N
The B+ye* #!-- ,e ent!t-ed to hae the
2oods !ns'e%ted ,y D!na%onnt*o- at the
dest!nat!on1 !" any d!s%*e'an%y a*!ses !n *es'e%t
o" >+ant!ty and >+a-!ty the B+ye* #!-- "!*st -od2e
%-a!$ ,y %a,-e #!th the Se--e*1 then #!th!n @)
days "*o$ the date o" d!s%ha*2e #!-- $a.e a
"o*$a- %-a!$ #!th s+''o*t!n2 do%+$ents1 s+%h
%-a!$ sha-- ,e set--ed ,y the Se--e* #!th!n 4) days
"*o$ !ts *e%e!'t o" the B+ye*Hs "o*$a- %-a!$
2R-ICLE >II: (3RCE M2DE0RE
Ne!the* 'a*ty sha-- ,e he-d *es'ons!,-e "o*
de-ay o" "a!-+*e o" 'e*"o*$an%e o" o,-!2at!ons
'*o!ded "o* he*e!n #hen s+%h de-ay o* "a!-+*e !s
%a+sed ,y st*!.e1 "!*e1 "-ood1 A%t o" Aod1
ea*th>+a.e o* any -a#s1 *+-es1o* *e2+-at!ons o"
any 2oe*n$enta- a+tho*!ty o* othe* %ond!t!ons
,eyond !ts %ont*o- #h!%h %an not ,e "o*e%ast o*
'*o!ded a2a!nst and '*o!ded one o* ,oth 'a*t!es
a*e s+,Ce%t to s+%h o,-!2at!on.
The 'a*ty #!sh!n2 to %-a!$ *e-!e" ,y *eason
o" any o" the sa!d %!*%+$stan%es sha-- not!"y the
othe* 'a*ty !n #*!t!n2 o" the %!*%+$stan%e !ts
%o$$en%e$ent and %easat!on and then de-!e* a
%e*t!"!%ate !ss+ed ,y the Cha$,e* o" Co$$e*%e
at the '-a%e #he*e the eent o* eents o%%+*ed as
e!den%e the*eo"m In the eent o" de-ay %a+sed ,y
s+%h "o*%e $aCe+*e e6%eed!n2 <) days ea%h 'a*ty
sha-- hae the *!2ht to %an%e- h!s %ont*a%t1 +n-ess
othe*#!se a2*eed1 !n #h!%h %ase ne!the* 'a*ty
sha-- hae the *!2ht to %-a!$ da$a2es
2R-ICLE >III: 2R4I-R2-I3N
Th!s %ont*a%t #!-- ,e 2oe*ned ,y the
fiQ9 ': 4Lo .iim &S giao .Sng
1. BXo h!V$B ,Xo h!V$ %wa hQn2 hoR do
N2Tu! ,Rn %h\+ d! S!v+ .!`n M~! Rw! Ro
0. Thpn2 ,Ro 2!ao hQn2B
7 Thpn2 ,Ro t*Td% .h! 2!ao hQn2B T*Td% .h!
2! hQn21 n2Tu! ,Rn sW thpn2 ,Ro %ho n2Tu! M+a
,hn2 S!`n hoz% te-e6 v thu! 2!an 2!ao hQn2 da
tjnh Q tNn tQ+ Zn %h+yVn.
7 Thpn2 ,Ro %+! %n2 v 2!ao hQn2 B
T*on2 n2 08 2!u sa+ .h! 2! hQn21 N2Tu! ,Rn
sW thpn2 ,Ro ,hn2 S!`n hoz% te-e6 vB s hU'
S]n21 s -TUn21 t*~n2 -TUn2 %X ,[1 t*~n2 -TUn2
t\nh1 .j%h thTd% Md+n2 tj%h)1 s .!`n1 2!R t*\ hoR
S}n1 tNn tQ+ Zn %h+yVn1 s Zn S}n1 n2Qy tQ+ *u!
%Xn2...
fiQ9 ,. ;iim tra tji Lng =k .Sng
N2Tu! M+a %_ >+yvn nhu
DINACONTROG .!V$ t*a hQn2 ^ %Xn2 Scn1 nc+
%_ sa .hpn2 .hd' nha+ v s -TUn2 Q %hft
-TUn2 th[ t*Td% t!Nn N2Tu! M+a sW 2! S!`n .h!c+
ns! %ho n2Tu! BRn1 sa+ S_ t*on2 n2 @) n2Qy .V
ty n2Qy db hQn2 n2Tu! M+a 'hX! -Q$ .h!c+ ns!
%hjnh thx% S! ,]! thTun2 %n2 %R% tQ! -!`+ .$
theo1 n2Tu! BRn 'hX! 2!X! >+yct %ho n2Tu! M+a
t*on2 n2 4) n2Qy nhZn STU% yN+ %|+ %hjnh
thx% S! ,]! thTun2 %wa n2Tu! M+a
fiQ9 6: -rUhng .Ep "bt k.L k.Tng
/hpn2 ,Nn nQo 'hX! %h\+ t*R%h nh!`$ v sa
t*[ hon hoz% sa .hpn2 tha% h!`n STU% nhqn2
n2ha r d! S!v+ .!`n -Q sa t*[ hon hoz% sa
.hpn2 tha% h!`n STU% nhqn2 n2ha r S_ 6Xy *a
do S[nh %pn21 hoX hosn1 - -rt1 tR% SPn2 %wa th!Nn
nh!Nn1 SPn2 Sft1 hoz% nhqn2 -+Zt -` >+! tO%1 >+!
S\nh %wa %R% nhQ %hx% t*R%h1 hoz% nhqn2 S!v+
.!`n .hR% .hpn2 thV da SoRn hoz% -Tun2 t*Td%
STU%
BNn yN+ %|+ .h!c+ ns! v th!`t hs! do ,ft .[
t*Tun2 hU' nQo S nN+ sW thpn2 ,Ro %ho ,Nn
,hn2 n ,Xn Q theo S_ 2! $Pt 2!fy %hxn2
nhZn do Phn2 ThT}n2 $s! ts! n}! 6Xy *a sa !`%
%f'1 nhT -Q %hxn2 %x %wa !`% S_. /h! sa t*[ hon
do t*Tun2 hU' ,ft .hX .hRn2 nN+ t*Nn $Q TUt
>+R <) n2Qy1 $! ,Nn %wa hU' S]n2 %_ >+yvn h+
,Y hU' S]n2 nQy1 t*on2 t*Tun2 hU' S_ .hpn2 ,Nn
nQo %_ >+yvn .h!c+ ns! %+! %n2 v nhqn2 th!`t
hs!
fiQ9 8: -rang tSi
HU' S]n2 nQy %h\+ sa %h! 'h! %wa
In%ote*$s 1@@). Nhqn2 t*anh %hf' 'hRt s!nh ty
hU' S]n2 nQy $Q ha! ,Nn .hpn2 2!X! >+yct ,hn2
thT}n2 -TUn2 sW STU% 2!X! >+yct ,^! T*~n2 tQ!
ThT}n2 $s! Q+% tc ts! Pa*!s1 theo %R% >+! %hc
'*o!s!on o" In%ote*$s 1@@). I" any d!s'+te that
a*!ses +nde* th!s %ont*a%t %an not ,e sett-ed ,y an
a$!%a,-e a2*ee$ent ,et#een the t#o s!des1 the
$atte* sha-- ,e sett-ed ,y the Inte*nat!!ona-
Co$$e*%!a- A*,!t*at!on !n Pa*!s !n a%%o*dan%e
#!th !ts *+-es
2R-ICLE IB: 3-5ER C3NDI-I3N1
The Buyer shall give a guarantee
pursuant to procedure at the Bank for
oreign Trade of !ietnam
6{t 6 %wa n_
fiQ9 9: CT FiQ9 kiRn k.T
N2Tu! M+a sW 'hX! -Q$ thw tr% ,Xo -nh ts! n2n
hQn2 N2os! thT}n2 D!`t Na$
Contrat for Ne)sprinting paper
Contrat V No %@' -LW
Bet#eenB
D!etna$ S%!ent!"!%7 P*od+%t!on Un!on o" Aeodesy and Ca*to2*ah'y
Gan2 T*+n2 7 9on2 9a 7 Ha No! 7 D!etna$
Te-B 80.88<80@ Te-e6B 0@888= D!et%o DT
He*e!na"te* %a--ed the B+ye*
2n=:
433 13N Co., L-D
RM. 4)<1 9ONAHWA BG9A
1@701 NONH:UN 7 9IONA1 /ANANAM 7 /U
SEOUG1 /OREA
Ca,-e add*essB TWOHAN9CO1 SEOUG1 /OREA
He*e!na"te* %a--ed Se--e*
It has ,een a2*eed that B+ye* ,+ys and Se--e* se--s on the te*$s and %ond!t!ons as "o--o#sB
2R-ICLE 1: DE1CRI+-I3N - 1+ECI(IC2-I3N- /02LI-7- /02N-I-7
1. 9es%*!'t!onB NEWSPRINTINA PAPER
0. Co+nt*y o" o*!2!nB CHINA
4. Ma.e*Hs na$eB
8. Q+a-!ty S'e%!"!%at!onB S+,stan%eB 8@ 7 0 2$0
Ro IG =8= $$ #!dth
(. Q+ant!tyB 0)) MT 7 (n
<. Pa%.!n2B EPORT STAN9AR9
=. Ma*.!n2B
S+,stan%eB 8@ 2$0 70
9est!nat!onB Ha!'hon2 Po*t
8. 9est!nat!onB
HAIPHONA PORT
2R-ICLE II: +RICE
P*!%e to ,e +nde*stood CI; Ha! Phon2 'o*t !n%-+d!n2 Sea#o*thy 'a%.!n2
Un!t '*!%eB US9 (4(MT
Tota- a$o+ntB US9 1)=1))).))
SayB Un!ted States 9o--a* one h+nd*ed and seen tho+sand on-y
2R-ICLE III: DELI>ER7 -IME
8) days a"te* GC *e%e!ed
2R-ICLE I>: +27MEN-
By !**eo%a,-e Gette* o" C*ed!t !n U.S 9o--a* #!th!n 18) days #!th ).8n o" d!!dend M !n
"ao+* o" ) ea%h the Se--e* and 'aya,-e and 'aya,-e on '*esentat!on to the Ban. "o* ;o*e!2n T*ade o"
D!etna$ o" the "o--o#!n2 do%+$ents1 ea%h !n th*ee %o'!esB
7 C-ean on ,oa*d B!-- o" Gad!n2
7 Co$$e*%!a- Ino!%e
7 Ce*t!"!%ate o" #e!2ht ando* >+ant!ty
7 Ce*t!"!%ate o" Q+ant!ty !ss+ed ,y the Se--e* ando* the Ma.e*
7 Ce*t!"!%ate o" O*!2!n !ss+ed ,y Cha$,e* o" Co$$e*%e ando* the Se--e*
7 Ins+*an%e Po-!%y
7 Re%e!'t o" Sh!'$aste* a%.no#-ed2!n2 !t d+-y ha!n2 *e%e!ed 4 sets o" non7 ne2ot!at!on
sh!''!n2 do%+$ents as a,oe $ent!oned
7 Gette* o" C*ed!t #!-- ,e a-!d "o* 1( days a"te* -oad!n2 %o$'-eted. The B+ye* and the S--e*
#!-- ,ea* ,an. %ha*2es !n the!* *es'e%t!e %o+nt*y ,+t %ha*2es "o* a$end$ent o* e6tens!on o" GC
#!-- ,e ,o*ne ,y 'a*ty that *e>+!*es.
2R-ICLE >: IN10R2NCE A 15I+MEN-
1. Ins+*an%e B
Ins+*an%e "o* the %ont*a%ted 2oods #!-- ,e %oe*ed ,y the Se--e* ,y A-- R!s. Po-!%y
0. Not!%e o" sh!'$entB
7 P*e7 ad!%e o" sh!'$entB Be"o*e sh!'$ent o" the 2oods the Se--e* sha-- ad!%e ,y %a,-ete-e6
the B+ye* o" est!$ated t!$e o" sh!'$ent and na$e o" %a**y!n2 esse-
7 ;!na- ad!%e o" sh!'$entB #!th!n 08 ho+*s a"te* sh!'$ent the Se--e* sha-- ad!%e ,y %a,-ete-e6
B Cont*a%t No1 >+ant!ty1 2*oss #e!2ht1 net #e!2ht1 $eas+*e$ent1 n+$,e* o" 'a%.a2es1 !no!%e a-+e1
na$e o" %a**y!n2 esse-1 B!-- o" Gad!n2 n+$,e*1 sa!-!n2 date "o* !ns+*an%e '+*'ose
2R-ICLE >I: +3R- 3( DIC52R<E 2ND IN1+EC-I3N
The B+ye* #!-- ,e ent!t-ed to hae the 2oods !ns'e%ted ,y D!na%onnt*o- at the dest!nat!on1 !"
any d!s%*e'an%y a*!ses !n *es'e%t o" >+ant!ty and >+a-!ty the B+ye* #!-- "!*st -od2e %-a!$ ,y %a,-e
#!th the Se--e*1 then #!th!n @) days "*o$ the date o" d!s%ha*2e #!-- $a.e a "o*$a- %-a!$ #!th
s+''o*t!n2 do%+$ents1 s+%h %-a!$ sha-- ,e set--ed ,y the Se--e* #!th!n 4) days "*o$ !ts *e%e!'t o" the
B+ye*Hs "o*$a- %-a!$
2R-ICLE >II: (3RCE M2DE0RE
Ne!the* 'a*ty sha-- ,e he-d *es'ons!,-e "o* de-ay o" "a!-+*e o" 'e*"o*$an%e o" o,-!2at!ons
'*o!ded "o* he*e!n #hen s+%h de-ay o* "a!-+*e !s %a+sed ,y st*!.e1 "!*e1 "-ood1 A%t o" Aod1 ea*th>+a.e
o* any -a#s1 *+-es1o* *e2+-at!ons o" any 2oe*n$enta- a+tho*!ty o* othe* %ond!t!ons ,eyond !ts %ont*o-
#h!%h %an not ,e "o*e%ast o* '*o!ded a2a!nst and '*o!ded one o* ,oth 'a*t!es a*e s+,Ce%t to s+%h
o,-!2at!on.
The 'a*ty #!sh!n2 to %-a!$ *e-!e" ,y *eason o" any o" the sa!d %!*%+$stan%es sha-- not!"y the
othe* 'a*ty !n #*!t!n2 o" the %!*%+$stan%e !ts %o$$en%e$ent and %easat!on and then de-!e* a
%e*t!"!%ate !ss+ed ,y the Cha$,e* o" Co$$e*%e at the '-a%e #he*e the eent o* eents o%%+*ed as
e!den%e the*eo"m In the eent o" de-ay %a+sed ,y s+%h "o*%e $aCe+*e e6%eed!n2 <) days ea%h 'a*ty
sha-- hae the *!2ht to %an%e- h!s %ont*a%t1 +n-ess othe*#!se a2*eed1 !n #h!%h %ase ne!the* 'a*ty sha--
hae the *!2ht to %-a!$ da$a2es
2R-ICLE >III: 2R4I-R2-I3N
Th!s %ont*a%t #!-- ,e 2oe*ned ,y the '*o!s!on o" In%ote*$s 1@@). I" any d!s'+te that a*!ses
+nde* th!s %ont*a%t %an not ,e sett-ed ,y an a$!%a,-e a2*ee$ent ,et#een the t#o s!des1 the $atte*
sha-- ,e sett-ed ,y the Inte*nat!!ona- Co$$e*%!a- A*,!t*at!on !n Pa*!s !n a%%o*dan%e #!th !ts *+-es
2R-ICLE B: 3-5ER C3NDI-I3N1
The B+ye* sha-- 2!e a 2+a*antee '+*s+ant to '*o%ed+*e at the Ban. "o* ;o*e!2n T*ade o" D!etna$
(3R -5E 1ELLER (3R -5E 407ER
HU' S]n2 2!fy !n ,Ro M,Xn t!cn2 D!`t)
5[+ X\N< <I]7 IN 4^3
5[+ X\N< 1_ %@' -L
NgS$ 1 t.Tng 1% n`m 1999
<iPa:
LiKn .iRp ;.oa .a sLn x9bt -rc Fda 4Ln FG
\a %hB GRn2 T*+n2 7 n2 a 7 HQ NP! 7 D!`t Na$
!`n thos!B 80.88<80@
Te-e6B 0@888= D!et%o DT
;a6B 88787(<88<
9Td! Sy 2~! -Q n2Tu! M+a
>S:
Ceng t$ 433 13N, L-D
\a %hB RM. 4)<1 9ONAHWA BG9A
1@701 NONH:UN 7 9IONA1 /ANANAM 7 /U
SEOUG1 /OREA
\a %h S!`n tjnB TWOHAN9CO1 SEOUG1 /OREA
9Td! Sy 2~! -Q N2Tu! BRn
Ha! ,Nn thoX th+ZnB N2Tu! M+a $+a Q n2Tu! BRn ,Rn %R% $zt hQn2 d! %R% S!v+ .hoXn sa+B
fiQ9 1: Mgt .Sng, 89$ T., .bt #UEng &S sJ #UEng
1. Mzt hQn2B A!fy !n ,Ro
0. NTd% 6+ft 6xB T*+n2 Q+%
4. TNn n2Tu! sXn 6+ftB
8B Chft -TUn2 Q >+! %R%hB \nh -TUn2 8@ 7 0 2a$$0
C+Pn .h *Pn2 =8= $$
(. S -TUn2B 0)) MT M tfn ${t) 7 (n
<. _n2 2_!B Sst t!N+ %h+gn 6+ft .hg+
=. /j $ h!`+B S+,stan%eB 8@ 2$0 70
9est!nat!onB Ha!'hon2 Po*t
8. CXn2 ScnB CXn2 HX! Phn2
fiQ9 %: <iT L
A!R CI; %Xn2 HX! Phn2 ,ao 2]$ %X t!vn ,ao ,[ S_n2 2_! %_ thV S! ,!Vn STU%
}n 2!RB US9 (4(MT
Tn2 t*\ 2!RB 1)=.)))1))US9
Bhn2 %hqB MPt t*$ -!nh ,Xy n2h[n p-a M %hn
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NgUhi 4Tn NgUhi M9a
11-1<
*. Risk, t.e Contrat, an= t.e La)
THE PROBGEM
The -a# o""e*s '*ote%t!on to ,oth e6'o*te* and !$'o*te*. What !s th!s 5-a#?& And ho# %an
the t#o 'a*t!es ens+*e that they a%h!ee the ,est 'oss!,-e '*ote%t!on&
-5E +RINCI+LE
Ga# e6!sts !n t#o "o*$s1 '+,-!% and '*!ate. P+,-!% -a# *e2+-ates the *e-at!onsh!' ,et#een
the %!t!Een and the state. P*!ate -a# *e2+-ates *e-at!onsh!' ,et#een '*!ate %!t!Eens Mo*
%o$'an!es). Most '*o!s!ons o" the '*!ate -a# a*e d!s'os!elthe 'a*t!es to a %ont*a%t a*e
"*ee to %han2e o* !2no*e the$. A #e-- #*!tten %ont*a%t %-a*!"!es e6a%t-y #hat the 'a*t!es hae
a2*eed and1 s+''-e$enta*y to the!* a2*ee$ent1 #h!%h -a# they hae %hosen to "!-- !n any
2a's. Cont*a%t -a# ,e-on2s to the '*!ate -a#.
A ne2ot!ated1 #*!tten %ont*a%t !s a .ey sa"e2+a*d a2a!nst the *!s.s o" e6'o*t!n2.
IN M3RE DE+-5
S+%%ess"+- t*ade de'ends on 'ea%e"+- and o*de*-y $oe$ent o" 2oods and $oney
,et#een %o$$+n!t!es. In the $ode$ #o*-d1 the $a!n sa"e2+a*d o" 'ea%e and o*de* !s
'*o,a,-y the -a#. W!th!n $ost so%!et!es1 -a# e6!sts !n t#o "o*$s1 '+,-!% and '*!ate. The
p!blic la" !s !$'osed ,y a 2oe*n$ent #!th!n a s'e%!"!% te**!to*yB the %!t!Een o* "o*e!2ne*
#!th!n th!s te**!to*y !s o,-!2ed to o,eym private la" *e2+-ates the *!2hts o" !nd!!d+a-
%!t!Eens a$on2 the$se-es. MNot a-- -e2a- syste$s $a.e th!s a,so-+te d!st!n%t!on1 ,+t !t
he-'s o+* '*esent '+*'ose. The p!blic la" o" a %o+nt*y %ont*o-s1 "o* e6a$'-e1 ta6at!on1
!$$!2*at!on1 %*!$e1 +se o" "o*e!2n e6%han2e1 and s+%h $atte*s. P*!ate -a# %ont*o-s1
ty'!%a--y1 %ont*a%ts o" sa-e1 e$'-oy$ent %ont*a%ts1 %ont*a%ts to -end $oney1 and so on.
One ,*an%h o" '*!ate -a# 'a*t!%+-a*-y %on%e*ns +s he*e1 %ont*a%t -a#. #h!%h -oo.s at the
a2*ee$ents %!t!Eens o* %o$'an!es $a.e #!th ea%h othe*.
When Pate- a2*eed 1) se-- Ao$eE %ha!*s "o* k@1)))1 the t#o o" the$ ente*ed a %ont*a%t. A
%ont*a%t !s an a2*ee$ent en"o*%ea,-e o" -a#B ,oth s!des %an as. a %o+*t to en"o*%e the!* *!2hts1
and !t #!-- do so. MNot a-- a2*ee$ents a*e %ont*a%tsB !" a teena2e* a2*ees #!th h!s 'a*ents to
%o$e ho$e ,e"o*e $!dn!2ht and !s -atem he !s not !n ,*ea%h o" %ont*a%tB h!s a2*ee$ent !s not a
%ont*a%t1 ,e%a+se !t !s not. "o* a*!o+s *easons1 -e2a--y en"o*%ea,-e.) The essen%e o" an
en"o*%ea,-e a2*ee$ent !s that the 'a*t!es1 #hen they $ade !t1 !ntended to ,e -e2a--y ,o+nd ,y
the!* '*o$!ses. S!n%e Pate- and Ao$eE %-ea*-y !ntended t!ns1 they hae a %ont*a%t.
A %ont*a%t !s an e6%han2e o" *!2hts and d+t!es #!th!n the "*a$e#o*. o" the '*!ate -a#. These
*!2hts and d+t!es a*e s'e%!a--y %*eated ,y the t#o s!des and a''-y on-y to the$. Th!s !s %-ea* !"
#e -oo. at the k@.))) Ao$eE a2*ees to 'ayB +nt!- she *ea%hed he* a2*ee$ent #!th Pate-1 he
had no %-a!$ a2a!nst he* "o* any s+$ o" $oneyland. o" %o+*se1 she had no *!2ht to %-a!$
de-!e*y o" th!*ty %ha!*s. So #e %an say that1 !n *ea%h!n2 a dea-1 ea%h s!de s+**ende*s to the
othe* %e*ta!n %-ea*-y s'e%!"!ed *!2htsl"o* e6a$'-e1 the *!2ht o" Ao$eE to .ee' he* k@1))).
Ea%h 'a*ty *eta!ns1 o" %o+*se1 a-- *!2hts not e6'*ess-y 2!en +'. Any *!2ht that #e %an -e2a--y
#a!e !s %a--ed a d!s'os!e *!2htl#e a*e "*ee to d!s'ose o" !t. Most o" the *!2hts o" an
e6'o*te* +nde* the '*!ate -a# a*e d!s'os!e a-tho+2h #e sha-- %o$e to so$e e6%e't!ons1
*!2hts that %annot ,e 2!en a#ay. In '*!n%!'-e1 tho+2h1 the 'a*t!es a*e "*ee to a2*ee anyth!n2 as
-on2 as !t a""e%ts on-y the t#o o" the$. Th!s '*!n%!'-e !s .no#n "*eedo$ o" %ont*a%t and !t !s
#e-- esta,-!shed !n $ost -e2a- syste$s.
We hae a-*eady sa!d that the $!n!$+$ %ont*a%t Mscope !n e6%han2e "o* price) !s en"o*%ea,-e
,+t %onta!ns too $any +n%e*ta!nt!es. In '*a%t!%e1 ho# do ,+s!ness'eo'-e *e2+-ate th!n2s $o*e
e""e%t!e-y& The*e a*e th*ee ,as!% a''*oa%hesB *e-!an%e on t*ade '*a%t!%esm +se o" 2ene*a-
%ond!t!onsm and the %on%-+s!on o" a ne2ot!ated1 #*!tten %ont*a%t.
Trade Practices
So$e t*adesl"o* e6a$'-e1 the d!a$ond t*ade !n Ant#e*'lhae #e-- esta,-!shed *+-es
"a$!-!a* to ee*yone !n the ,+s!nessm t#o dea-e*s need a2*ee noth!n2 $o*e than s%o'e and
'*!%e. S!$!-a*-y1 *!%e $e*%hants !n So+theast As!a se-do$ ente* e-a,o*ate a2*ee$entslthe
*+-es a*e too #e-- .no#n to ,oth s!des.
!eneral Conditions
Mo*e %o$$on !s the se%ond a''*oa%hB the +se o" 2ene*a- %ond!t!ons o" sa-e o* o" '+*%hase.
Aene*a- %ond!t!ons #o*. !n th!s #ayB a ,+ye* sends an o*de* to an e6'o*te*. So$e#he*e on
the o*de* a*e the #o*dsB HTh!s o*de* !s s+,Ce%t to o+* Aene*a- Cond!t!ons o" P+*%hase as
'*!nted on the ,a%. o" th!s O*de* ;o*$.K When the e6'o*te* sends the o*de* %on"!*$at!on "o*
the !no!%e) !t1 !n t+*n1 ,ea*s the #o*dsB KA-- 2oods a*e s+''-!ed s+,Ce%t to o+* Aene*a-
Cond!t!ons o" Sa-e as '*!nted on the ,a%. o" th!s O*de* Con"!*$at!on.K :o+ hae '*o,a,-y
seen s+%h 2ene*a- %ond!t!onsm they a*e +s+a--y !n e*y s$a-- '*!nt and *e2+-ate ee*y
"o*eseea,-e '*o,-e$ !n "ao* o" the 'a*ty #ho d*a"ted the$.
=
The '*o,-e$ he*e !s o,!o+sB
ea%h s!de says1 KMy %ond!t!ons a''-y.K B+t ne!the* s!de has a2*eed to the othe*Hs %ond!t!ons.
In s+%h a s!t+at!on1 the t#o s!des hae e*y d!""e*ent e6'e%tat!ons1 and d!s'+tes a*e !ne!ta,-e.
I" a d!s'+te 2oes ,e"o*e a %o+*t1 the C+d2e $+st 2!e one set o" %ond!t!ons '*e"e*en%e. B+t
#h!%h& The ans#e* !s +n'*ed!%ta,-eB and +n'*ed!%ta,!-!ty !s anothe* na$e "o* *!s.. E6'o*t!n2
on the ,as!s o" 2ene*a- %ond!t!onsles'e%!a--y !" the ,+ye* does not a2*ee to the$ !n
adan%e77!s +nne%essa*!-y *!s.y "o* the e6'o*te*.
The Negotiated" #ritten Contract
The th!*d a''*oa%h to e6'o*t a2*ee$ents !s the $ost '*o"ess!ona- and the sa"estB ne2ot!at!n2
the te*$s o" the a2*ee$ent and '+tt!n2 the$ !n #*!t!n2lthe ne2ot!ated #*!tten %ont*a%t. The
adanta2es a*e o,!o+s. ;!*st1 %-a*!tyB a-- the %*+%!a- !ss+es a*e *eso-ed d+*!n2 ne2ot!at!on1
$a.!n2 d!s'+tes +n-!.e-y. Then #o*.a,!-!tyB ,oth s!des .no# #hat they hae to do and a*e
%on"!dent that they %an do !tB th!s %*eates a 2ood #o*.!n2 *e-at!onsh!'. And "!na--y
en"o*%ea,!-!tyB !" a d!s'+te a*!ses1 ,oth s!des %an *e*ead the %ont*a%t and "!nd a %-ea* state$ent
o" the!* $+t+a- *!2hts and d+t!es. Us+a--y the d!s'+te %an ,e *eso-ed #!tho+t the he-' Mand
e6'ense) o" the %o+*tsl'eo'-e se-do$ 2o to -a# #hen the %ase !s %-ea*.
The $ent!on o" -a#ye*s ,*!n2s +s to the $a!n '*o,-e$ #!th %ont*a%tsB ,e%a+se they a*e no*$a--y
d*a"ted ,y a -a#ye*1 they a*e e6'ens!e and so$et!$es d!""!%+-t to +nde*stand. These '*o,-e$s a*e
not !nso-+,-eB !n the "o--o#!n2 %ha'te*s yo+ #!-- "!nd ad!%e on $any %o$$on '*o!s!ons "o+nd !n
e6'o*t %ont*a%ts. That #!-- he-' yo+ #!th $ost o" the KCa*2on.K :o+ #!-- a-so "!nd a K$ode- sa-es
%ont*a%t.K Us!n2 a $ode- %ont*a%t "o* yo+* o#n e6'o*t ,+s!ness has a n+$,e* o" adanta2esB ,y
%o$'-et!n2 the a*!o+s %-a+ses1 yo+ ens+*e that yo+ hae ne2ot!ated a-- the essent!a-sm ,y +s!n2 the
o't!ons !n the $ode- %ont*a%t1 yo+ 2a!n "-e6!,!-!ty d+*!n2 ne2ot!at!onsm and ,y esta,-!sh!n2 a so+nd
-e2a- *e-at!onsh!'1 yo+ he-' th!n2s *+ns s$ooth-y !n "+t+*e. MI" yo+ a*e !n do+,t1 yo+ sho+-d as. a
-a#ye* to %he%. the "!na- e*s!on o" yo+* %ont*a%t.)
The ,est sa"e2+a*d a2a!nst the *!s.s o" e6'o*t!n2 !s a %ont*a%t that !s %-ea*1 #o*.a,-e and en"o*%ea,-e.
:.at 7o9 1.o9#= ;no)
1. Ga# has t#o ,*an%hes1 p!blic and private.
'. A %ont*a%t o'e*ates #!th!n the s'he*e o" '*!ate -a#.
4. Most *!2hts and d+t!es +nde* the '*!ate -a# a*e d!s'os!em the 'a*t!es %an a2*ee to set the$ as!de.
8. The 'a*t!es to a %ont*a%t %*eate ne#1 -e2a--y en"o*%ea,-e *!2hts and d+t!es that e6!st on-y ,et#een
the t#o o" the$.
(. The 'a*t!es %annot set as!de *!2hts o* d+t!es +nde* the '+,-!% -a#.
<. In '*!n%!'-e1 the 'a*t!es a*e "*ee to %hoose #h!%h nat!ona- '*!ate -a# a''-!es to the!* %ont*a%t.
=. I" a 'a*t!%+-a* t*ade has st*on21 #e-- +nde*stood %onent!ons1 the 'a*t!es o"ten a2*ee on-y the
$!n!$+$ %ont*a%tB s%o'e and '*!%e.
8. T*ade !s o"ten %ond+%ted on the ,as!s o" 2ene*a- %ond!t!ons o" sa-e o* '+*%hasem th!s o"ten -eads to
%on"-!%t ,et#een sets o" %ond!t!ons.
@. The sa"est and $ost sat!s"a%to*y ,as!s "o* %on%-+d!n2 an e6'o*t a2*ee$ent !s the ne2ot!ated #*!tten
%ont*a%t. A $ode- %ont*a%t %an o""e* +se"+- 2+!dan%e.
777777777777777777777777777777777777777
=
The '*o,-e$ o" %on"-!%t!n2 sets o" 2ene*a- %ond!t!ons1 the so7%a--ed KBatt-e o" the ;o*$s.K !s
d!s%+ssed !n $o*e deta!- !n Cha'te* 81 Se%t!on 4.
What :o+ Sho+Id /no#
1. Ga# has t#o ,*an%hes1 p!blic and private.
0. A %ont*a%t o'e*ates #!th!n the s'he*e o" '*!ate -a#.
4. Most *!2hts and d+t!es +nde* the '*!ate -a# a*e d!s'os!em the 'a*t!es %an a2*ee to set the$ as!de.
8. The 'a*t!es to a %ont*a%t %*eate ne#1 -e2a--y en"o*%ea,-e *!2hts and d+t!es that e6!st on-y ,et#een the
t#o o" the$.
(. The 'a*t!es %annot set as!de *!2hts o* d+t!es +nde* the '+,-!% -a#.
<. In '*!n%!'-e1 the 'a*t!es a*e "*ee to %hoose #h!%h nat!ona- '*!ate -a# a''-!es to the!* %ont*a%t.
=. I" a 'a*t!%+-a* t*ade has st*on21 #e-- +nde*stood %onent!ons1 the 'a*t!es o"ten a2*ee on-y the
$!n!$+$ %ont*a%tB s%o'e and '*!%e.
8. T*ade !s o"ten %ond+%ted on the ,as!s o" 2ene*a- %ond!t!ons o" sa-e o* '+*%haseB th!s o"ten -eads to
%on"-!%t ,et#een sets o" %ond!t!ons.
@. The sa"est and $ost sat!s"a%to*y ,as!s "o* %on%-+d!n2 ah e6'o*t a2*ee$ent !s the ne2ot!ated #*!tten
%ont*a%t. A $ode- %ont*a%t %an o""e* +se"+- 2+!dan%e.

CONCEPT REDIEW
A Ta67;*ee Cont*a%t
A-e% Pate-Hs %o$'any1 O""!%e Ente*'*!ses1 !n De*,ena !s se--!n2 o""!%e "+*n!t+*e to an !$'o*te* !n
Es'e*anEa. The 'a*t!es a2*ee that KThe -a# o" De*,ena a''-!es.K Pate-1 ho#ee*1 #ants to ens+*e that
he !s not -!a,-e "o* ta6 +nde* the ta6 -a# o" Es'e*anEam the*e"o*e1 Pate-Hs -a#ye* t*!es to '+t th!s %-a+se
!n the e6'o*t %ont*a%tB
(ll income ta)es or ot*er ta) obli$ations create+ as a res!lt o#
t*is contract s*all be assesse+ an+ re$!late+ e)cl!sively accor+in$ to t*e Verbenan ta) la"
in #orce at t*e time o# assessment.
1. Is O""!%e Ente*'*!ses no# "*ee o" Es'%*anEan !n%o$e ta6es&
:ES
NOl,e%a+se ta6 -a# !s '+,-!% -a# and the 'an!%s %annot set !t as!de
NOl,e%a+se the %-a+se !s #o*ded too #ea.-y
0. 9oes the %-a+se ,e-o# %*eate a Kta67"*ee %ont*a%tK "o* O""!%e Ente*'*!ses&
T*e B!yer s*all compensate an+ save *armless t*e ,eller #rom all
ta)es assesse+ a$ainst t*e ,eller by t*e $overnment- o# t*e
B!yer.s co!ntry.
:ES NO :ES1 UNGESS
1. No. The 'a*t!es to a %ont*a%t %annot set as!de '+,-!% -a# s+%h as ta6 -a#.
0. :es7 +n-ess the ,+ye* 2oes ,an.*+'t o* +n-ess the*e !s a -a# !n the ,+ye*3s %o+nt*y "o*,!dd!n2
s+%h %-a+ses !n %ont*a%ts.
-rans#ate into >ietnamese
Mt+ hU' S]n2 %h+yVn 2!ao %pn2 n2h`
-R2DEM2R; LICEN1E 2<REEMEN-
Bet#eenB
A) In"o*$at!on a,o+t G!%enso*
AndB
B) D!etna$ ;o*est Co*'o*at!on MDINA;OR)1 a
%o$'any o*2an!Eed and e6!st!n2 +nde* the -a#s
o" the So%!a-!st Re'+,-!% o" D!etna$ Mhe*e!na"te*
%a--ed 5the G!%ensee?.
M9eta!-ed !n"o*$at!on a,o+t 'a*ty B)
Whe*eas the -!%enso* !s the o#ne* o" T*ade$a*.
Re2!st*at!on Ce*t!"!%ate #h!%h !s !ss+ed ,y the
Nat!ona- O""!%e o" Ind+st*!a- P*o'e*ty o" D!etna$
M5NOIP?) "o* the T*ade$a*. 5UNION?.
Mthe 5T*ade$a*.?) "o* $oto* %y%-esB and
Whe*eas the G!senso* a2*ees to -!%ense the *!2ht
to +se !n D!etna$ to the G!%ensee.
No#1 the*e"o* ,oth 'a*t!es a2*ee as "o--o#sB
A!qaB
A) Thpn2 t!n v Cf' Ph{'B
B) Tn2 %pn2 ty G$ n2h!`' D!`t Na$
MDINA;OR)1 $Pt %pn2 ty t %hx% Q t]n ts! theo
'hR' -+Zt %wa nTd% CPn2 hoQ 6 hP! %hw n2ha
D!`t Na$ Msa+ Sy 2~! -Q K%f' 'h{'K Mthpn2 t!n
%h! t!ct v ,Nn B)
T*on2 .h! S_1 n2Tu! %f' 'h{'. -Q %hw s^ hq+ %wa
A!fy %hxn2 nhZn Sn2 .e nhn h!`+ do Cr% S^
hq+ %pn2 n2h!`' %wa D!`t Na$ MCr% S^ hq+ t*j
t+` K) %ho %R% thT}n2 h!`+K ON KMK ThT}n2
h!`+ K) %ho SPn2 %} %h+ .B T*on2 .h! G!senso*
S]n2 e %f' 2!fy 'h{' >+yvn SV s drn2 ts! D!`t
Na$ SV STU% %f' 'h{'1 do %X ha! ,Nn S]n2 e nhT
sa+B
2rti#e 1: <rant of t.e #iense
1.1 The G!%enso* he*e,y 2*ants to the G!%ensee1
and the G!%ensee he*e,y a%%e'ts the -!%ense Mthe
5G!%ense?) to +se the T*ade$a*. +nde*
Ce*t!"!%ate !n the Te**!to*y.
1.0 The G!%enso* sha-- hae the *!2ht to 2*ant the
-!%ense to any th!*d 'a*ty !n the te**!to*y o"
D!etna$ othe* than the G!%ensee he*e!n.
!v+ 1B Cf' 2!fy 'h{' 1.1 Cf' Ph{' sW h t*U SV
STU% %f' 'h{'1 Q STU% %f' 'h{' hTdn2 %hf'
nhZn 2!fy 'h{' MKA!fy 'h{'K) SV s drn2 thT}n2
h!`+ theo A!fy %hxn2 nhZn t*on2 Gnh th. 1.07
Cf' Ph{' %_ >+yvn %f' 2!fy 'h{' %ho ,ft . ,Nn
thx ,a t*Nn -nh th %wa D!`t Na$ .hR% so d!
%R% tQ! -!`+ nQy STU% %f' 'h{'.
2rti#e %: 3"let of t.e #iense
The G!%ensee !s ent!t-ed to a''-y the T*ade$a*.
to $oto* %y%-es #h!%h a*e !$'o*ted !n C/9
ando* I/9 "o*$ "*o$ the G!%enso* then
asse$,-ed and so-d !n D!etna$.
2rti#e *: -erritor$
The G!%ense !s e""e%t!e !n the ent!*e te**!to*y o"
the So%!a-!st Re'+,-!% o" D!etna$ M5the
Te**!to*y?).
2rti#e 4: -erm
Th!s a2*ee$ent sha-- ,e !na-!d +nt!- te*$!nat!on
o" the %ont*a%t "o* s+''-y!n2 s'a*e 'a*ts o" Un!on
$oto* %y%-e.
2rti#e ': 2men=ment, s9spension an=
ane##ation
(.1 U'on the *e>+est o" e!the* 'a*ty1 the
A2*ee$ent $ay ,e a$ended o* s+''-e$ented !n
#*!t!n2. Any a$end$ent o* s+''-e$ent $+st ,e
s!2ned ,y the -e2a- *e'*esentat!es o" the ,oth
'a*t!es.
(.0 The A2*ee$ent sha-- ,e te*$!nated !n the
"o--o#!n2 %asesB
a 7 E6'!*y o" %ont*a%t "o* s+''-y!n2 'a*ts "o*
Un!on $oto* %y%-es.
, 7 The !nd+st*!a- '*o'e*ty *!2hts o" the G!%enso*
a*e s+s'ended o* %an%e--ed.
% 7 The 'e*"o*$an%e o" the A2*ee$ent !s
'*eented ,y a "o*%e $aCe+*e eents. ;o*%e
$aCe+*e eents !n%-+de eents ,eyond the %ont*o-
o" the 'a*t!es !n%-+d!n21 ,+t not -!$!ted to1 a%ts o"
Aod1 st*!.es1 *!ots1 #a* and s!$!-a* eents.
!v+ 0B ! tTUn2 %wa 2!fy 'h{' STU% %f' 'h{'
%_ >+yvn R' drn2 %R% thT}n2 h!`+ Scn %h+ .
SPn2 %} nhZ' .hg+ t*on2 s+y thZn Q hoz% h[nh
thx% I/9 ty Cf' Ph{' sa+ S_ -O' *R' Q ,Rn ts!
D!`t Na$. !v+ 4B Gnh th A!fy 'h{' %_ h!`+
-a% t*on2 toQn ,P -nh th %wa nTd% CPn2 hoQ 6
hP! %hw n2ha D!`t Na$ MKGnh thK). !v+ 8B
Thu! hsn thYa th+Zn nQy sW .hpn2 %_ h!`+ -a%
%ho Scn .h! %hf$ dxt hU' S]n2 %+n2 %f' 'hr
tn2 thay thc %wa G!Nn $!nh SPn2 %} %h+ ..
!v+ (B Sa S!1 S[nh %h Q h+ ,Y (.1 /h! yN+
%|+ %wa $Pt t*on2 ha! ,Nn1 H!`' S\nh %_ thV STU%
sa S!1 , s+n2 ,hn2 n ,Xn. D!`% sa S!1 ,
s+n2 'hX! %_ %hq .e %wa n2Tu! Ss! d!`n 'hR' -e
%wa ha! ,Nn.
(10 H!`' S\nh 'hX! STU% %hf$ dxt t*on2 %R%
t*Tun2 hU' sa+ SyB 7 Hct thu! hsn hU' S]n2
%+n2 %f' 'hr tn2 %ho 6e $Ry G!Nn $!nh. , 7
CR% >+yvn s^ hq+ %pn2 n2h!`' %wa Cf' Ph{' ,\
S[nh %h hoz% hwy ,Y. % 7 D!`% tha% h!`n H!`'
S\nh -Q n2n %hzn $Pt sa .!`n ,ft .hX .hRn2. Sa
.!`n ,ft .hX .hRn2 ,ao 2]$ %R% sa .!`n n2oQ! sa
.!V$ soRt %wa %R% ,Nn1 ,ao 2]$1 nhTn2 .hpn2
2!d! hsn1 hQnh ! %wa Th!Nn Chia1 S[nh %pn21 ,so
-osn1 %h!cn t*anh Q %R% sa .!`n tT}n2 ta.
2rti#e ,: 3"#igations of t.e Liensor
<.1 The G!%enso* he*e,y *e'*esents that !t !s t*+e
and -e2a- o#ne* o" the T*ade$a*. and the 2*ant
o" the G!%ense o" the T*ade$a*. sha-- not
!n"*!n2e the !nd+st*!a- '*o'e*ty *!2hts o" any th!*d
'a*ty. The G!%enso* sha-- ,e *es'ons!,-e1 at h!s
o#n e6'enses1 to *eso-e any d!s'+te #!th any
th!*d 'a*ty a*!s!n2 "*o$ the 2*ant o" the G!%ense
+nde* th!s A2*ee$ent.
<.0 The G!%ensee sha-- ,e *es'ons!,-e to ta.e a--
ne%essa*y and a''*o'*!ate $eas+*es1 at h!s o#n
e6'enses1 to '*ose%+te !n"*!n2e$ents o" the
T*ade$a*. ,y any th!*d 'a*ty.
The G!%enso* sha-- hae the o,-!2at!on to "+--y
!v+ <B N2ha r %wa Cf' Ph{' <11 Cf' Ph{'
hTdn2 Ss! d!`n %ho *hn2 S_ -Q Sin2 sa thZt Q
'hR' -e %hw s^ hq+ nhn h!`+ hQn2 hoR Q %f'
2!fy 'h{' nhn h!`+ hQn2 hoR .hpn2 STU% 6$
'hs$ >+yvn s^ hq+ %pn2 n2h!`' %wa ,ft . ,Nn
thx ,a. Cf' Ph{' sW %h\+ t*R%h nh!`$1 %h! 'hj
*!Nn2 %wa $[nh1 SV 2!X! >+yct ,ft . t*anh %hf'
d! ,ft . ,Nn thx ,a 'hRt s!nh ty !`% %f' A!fy
'h{' theo H!`' S\nh nQy. <.0 STU% %f' 'h{' 'hX!
%h\+ t*R%h nh!`$ tha% h!`n tft %X %R% ,!`n 'hR'
%|n th!ct Q thj%h hU'1 %h! 'hj *!Nn2 %wa $[nh1 SV
t*+y t %R% hQnh ! 6$ 'hs$ nhn h!`+ hQn2
hoR ,^! ,ft . ,Nn thx ,a. Cf' Ph{' %_ n2ha r
hoQn toQn hU' tR% Q h t*U STU% %f' 'h{' t*on2
%oo'e*ate #!th and ass!st the G!%ensee !n any
s+%h $atte*.
2rti#e 6: 3"#igations of t.e Liensee
=.1 The G!%ensee sha-- ens+*e that the >+a-!ty o"
the P*od+%t asse$,-ed ,y the G!%ensee sha-- not
,e -o#e* than those $an+"a%t+*ed ,y the
G!%enso*. The $ethod to dete*$!ne the >+a-!ty o"
the P*od+%t sha-- ,e $+t+a--y a2*eed ,y the
G!%enso* and the G!%ensee.
=.0 The G!%ensee !s ent!t-ed to +se the T*ade$a*.
on-y !n the So%!a-!st *e'+,-!% o" D!etna$.
=.4 The G!%ensee !s not 'e*$!tted to t*ans"e* the
T*ade$a*. to any th!*d 'a*ty.
=.8 The G!%ensee sha-- hae the o,-!2at!on to
!dent!"y the G!%enso* on the P*od+%t o*...
=.( The G!%ensee sha-- ,e *es'ons!,-e "o*
s+,$!tt!n2 th!s A2*ee$ent to the NOIP "o*
*e2!st*at!on and 'ay!n2 a-- *e-eant "ee #!th!n
"!"teen M1() days "*o$ the date o" s!2n!n2 th!s
A2*ee$ent.
,ft . fn Sv nQo S_.
!v+ =B N2ha r %wa n2Tu! STU% %f' 'h{' =11
CR% %f' 'h{' 'hX! SX$ ,Xo *hn2 %hft -TUn2 %wa
sXn 'hg$ STU% -O' *R' ,hn2 %R%h %f' 'h{'
.hpn2 STU% thf' h}n so d! nhqn2 sXn 6+ft ,^!
Cf' Ph{'. CR% 'hT}n2 'hR' SV 6R% S\nh %hft
-TUn2 sXn 'hg$ sW STU% ha! ,Nn thoX th+Zn Cf'
Ph{' Q STU% %f' 'h{'. =10 %f' 'h{' %_ >+yvn
s drn2 nhn h!`+ hQn2 hoR %h t*on2 %R% nTd%
%Pn2 ha 6 hP! %hw n2ha D!`t Na$. =14 STU%
%f' 'h{' -Q .hpn2 STU% 'h{' %h+yVn nhTUn2
thT}n2 h!`+ %ho ,ft . ,Nn thx ,a. =.8 D!`% %f'
'h{' %_ n2ha r SV 6R% S\nh Cf' Ph{' sXn 'hg$
hoz% ... =1( %f' 'h{' sW %_ t*R%h nh!`$ t*[nh H!`'
S\nh nQy SV Cr% S^ hq+ t*j t+` Sn2 .e Q thanh
toRn hct %R% .hoXn 'hj %_ -!Nn >+an t*on2 thu!
hsn $Tu! -$ M1() n2Qy1 .V ty n2Qy .e .ct H!`'
S\nh nQy.
2rti#e 8: Disp9te Reso#9tion
Any d!s'+te1 ,*ea%h1 %ont*oe*sy o* %-a!$ a*!s!n2
o+t o" o* !n %onne%t!on #!th th!s A2*ee$ent sha--
,e "!*st-y sett-ed a$!%a,-y ,et#een t#o 'a*t!es. I"
the d!s'+te %an3t ,e sett-ed a$!%a,-y1 e!the* 'a*ty
has the *!2ht to s+,$!t the d!s'+te to
!nte*nat!ona- O*2an!Eat!on "oe sett-e$ent.
2rti#e 9: Imp#ementing +ro&isions
@.1 Th!s A2*ee$ent !s $ade on the ,as!s o"
e>+a-!ty and o-+nta*!s$. The t#o 'a*t!es '-ed2e
to %o$'-y st*!%t-y #!th the te*$s and %ond!t!ons
o" the A2*ee$ent.
@.0 The A2*ee$ent sha-- ,e $ade !n s!6 M<) sets
!n En2-!sh #h!%h sha-- ,e e>+a- "o*%e. Ea%h 'a*ty
sha-- .ee' th*ee M4) sets !n En2-!sh.
!v+ 8B 2!X! >+yct t*anh %hf' M~! t*anh %hf'1 !
'hs$1 t*anh %! hoz% .h!c+ ns! 'hRt s!nh ty hoz%
-!Nn >+an Scn H!`' S\nh nQy STU% t*Td% hct -Q
2!X! >+yct $Pt %R%h hq+ n2h\ 2!qa ha! ,Nn. Nc+
t*anh %hf' .hpn2 2!X! >+yct STU% $Pt %R%h hq+
n2h\1 $Pt t*on2 ha! ,Nn %_ >+yvn STa r t*anh
%hf' >+% tc T %hx% 2!X! >+yct . th.
!v+ @B Tha% h!`n Q+y S\nh @11 H!`' S\nh nQy
STU% tha% h!`n t*Nn %} s^ ,[nh Sn21 t[nh
n2+y`n. Ha! ,Nn %a$ .ct tha% h!`n Sin2 %R% S!v+
.hoXn Q S!v+ .!`n %wa H!`' S\nh. @10 H!`' S\nh
STU% tha% h!`n t*on2 sR+ M<) ,P ,hn2 t!cn2 Anh
%_ STU% ,hn2 -a% -TUn2. M! ,Nn 2!q ,a M4) ,P
,hn2 t!cn2 Anh.
Mt+ t!cn2 AnhB
-R2DEM2R; LICEN1E 2<REEMEN-
Bet#eenB
A) In"o*$at!on a,o+t G!%enso*
AndB
B) D!etna$ ;o*est Co*'o*at!on MDINA;OR)1 a %o$'any o*2an!Eed and e6!st!n2 +nde* the -a#s o" the
So%!a-!st Re'+,-!% o" D!etna$ Mhe*e!na"te* %a--ed 5the G!%ensee?.
M9eta!-ed !n"o*$at!on a,o+t 'a*ty B)
Whe*eas the -!%enso* !s the o#ne* o" T*ade$a*. Re2!st*at!on Ce*t!"!%ate #h!%h !s !ss+ed ,y the
Nat!ona- O""!%e o" Ind+st*!a- P*o'e*ty o" D!etna$ M5NOIP?) "o* the T*ade$a*. 5UNION?.
Mthe 5T*ade$a*.?) "o* $oto* %y%-esB and
Whe*eas the G!senso* a2*ees to -!%ense the *!2ht to +se !n D!etna$ to the G!%ensee.
No#1 the*e"o* ,oth 'a*t!es a2*ee as "o--o#sB
2rti#e 1: <rant of t.e #iense
1.1 The G!%enso* he*e,y 2*ants to the G!%ensee1 and the G!%ensee he*e,y a%%e'ts the -!%ense Mthe
5G!%ense?) to +se the T*ade$a*. +nde* Ce*t!"!%ate !n the Te**!to*y.
1.0 The G!%enso* sha-- hae the *!2ht to 2*ant the -!%ense to any th!*d 'a*ty !n the te**!to*y o" D!etna$
othe* than the G!%ensee he*e!n.
2rti#e %: 3"let of t.e #iense
The G!%ensee !s ent!t-ed to a''-y the T*ade$a*. to $oto* %y%-es #h!%h a*e !$'o*ted !n C/9 ando*
I/9 "o*$ "*o$ the G!%enso* then asse$,-ed and so-d !n D!etna$.
2rti#e *: -erritor$
The G!%ense !s e""e%t!e !n the ent!*e te**!to*y o" the So%!a-!st Re'+,-!% o" D!etna$ M5the Te**!to*y?).
2rti#e 4: -erm
Th!s a2*ee$ent sha-- ,e !na-!d +nt!- te*$!nat!on o" the %ont*a%t "o* s+''-y!n2 s'a*e 'a*ts o" Un!on
$oto* %y%-e.
2rti#e ': 2men=ment, s9spension an= ane##ation
(.1 U'on the *e>+est o" e!the* 'a*ty1 the A2*ee$ent $ay ,e a$ended o* s+''-e$ented !n #*!t!n2.
Any a$end$ent o* s+''-e$ent $+st ,e s!2ned ,y the -e2a- *e'*esentat!es o" the ,oth 'a*t!es.
(.0 The A2*ee$ent sha-- ,e te*$!nated !n the "o--o#!n2 %asesB
a 7 E6'!*y o" %ont*a%t "o* s+''-y!n2 'a*ts "o* Un!on $oto* %y%-es.
, 7 The !nd+st*!a- '*o'e*ty *!2hts o" the G!%enso* a*e s+s'ended o* %an%e--ed.
% 7 The 'e*"o*$an%e o" the A2*ee$ent !s '*eented ,y a "o*%e $aCe+*e eents. ;o*%e $aCe+*e eents
!n%-+de eents ,eyond the %ont*o- o" the 'a*t!es !n%-+d!n21 ,+t not -!$!ted to1 a%ts o" Aod1 st*!.es1
*!ots1 #a* and s!$!-a* eents.
2rti#e ,: 3"#igations of t.e Liensor
<.1 The G!%enso* he*e,y *e'*esents that !t !s t*+e and -e2a- o#ne* o" the T*ade$a*. and the 2*ant o"
the G!%ense o" the T*ade$a*. sha-- not !n"*!n2e the !nd+st*!a- '*o'e*ty *!2hts o" any th!*d 'a*ty. The
G!%enso* sha-- ,e *es'ons!,-e1 at h!s o#n e6'enses1 to *eso-e any d!s'+te #!th any th!*d 'a*ty a*!s!n2
"*o$ the 2*ant o" the G!%ense +nde* th!s A2*ee$ent.
<.0 The G!%ensee sha-- ,e *es'ons!,-e to ta.e a-- ne%essa*y and a''*o'*!ate $eas+*es1 at h!s o#n
e6'enses1 to '*ose%+te !n"*!n2e$ents o" the T*ade$a*. ,y any th!*d 'a*ty.
The G!%enso* sha-- hae the o,-!2at!on to "+--y %oo'e*ate #!th and ass!st the G!%ensee !n any s+%h
$atte*.
2rti#e 6: 3"#igations of t.e Liensee
=.1 The G!%ensee sha-- ens+*e that the >+a-!ty o" the P*od+%t asse$,-ed ,y the G!%ensee sha-- not ,e
-o#e* than those $an+"a%t+*ed ,y the G!%enso*. The $ethod to dete*$!ne the >+a-!ty o" the P*od+%t
sha-- ,e $+t+a--y a2*eed ,y the G!%enso* and the G!%ensee.
=.0 The G!%ensee !s ent!t-ed to +se the T*ade$a*. on-y !n the So%!a-!st *e'+,-!% o" D!etna$.
=.4 The G!%ensee !s not 'e*$!tted to t*ans"e* the T*ade$a*. to any th!*d 'a*ty.
=.8 The G!%ensee sha-- hae the o,-!2at!on to !dent!"y the G!%enso* on the P*od+%t o*...
=.( The G!%ensee sha-- ,e *es'ons!,-e "o* s+,$!tt!n2 th!s A2*ee$ent to the NOIP "o* *e2!st*at!on and
'ay!n2 a-- *e-eant "ee #!th!n "!"teen M1() days "*o$ the date o" s!2n!n2 th!s A2*ee$ent.
2rti#e 8: Disp9te Reso#9tion
Any d!s'+te1 ,*ea%h1 %ont*oe*sy o* %-a!$ a*!s!n2 o+t o" o* !n %onne%t!on #!th th!s A2*ee$ent sha--
,e "!*st-y sett-ed a$!%a,-y ,et#een t#o 'a*t!es. I" the d!s'+te %an3t ,e sett-ed a$!%a,-y1 e!the* 'a*ty
has the *!2ht to s+,$!t the d!s'+te to !nte*nat!ona- O*2an!Eat!on "oe sett-e$ent.
2rti#e 9: Imp#ementing +ro&isions
@.1 Th!s A2*ee$ent !s $ade on the ,as!s o" e>+a-!ty and o-+nta*!s$. The t#o 'a*t!es '-ed2e to
%o$'-y st*!%t-y #!th the te*$s and %ond!t!ons o" the A2*ee$ent.
@.0 The A2*ee$ent sha-- ,e $ade !n s!6 M<) sets !n En2-!sh #h!%h sha-- ,e e>+a- "o*%e. Ea%h 'a*ty
sha-- .ee' th*ee M4) sets !n En2-!sh.
Mt+ t!cn2 D!`tB
CPn2 hoQ 6 hP! %hw n2ha D!`t Na$
P% -Z' 7 Ta do 7 Hsnh 'hi%
5[+ X\N< C507mN <I23 CnN< N<5o
MSB.... HCACN)
7 Cn %x %hT}n2... 'h|n... %wa BP -+Zt dn sa.
7 Cn %x n2h\ S\nh s <4CP n2Qy 081)1@@<.
7 Cn %x thpn2 tT s 4)((B/HCNMT n2Qy
41101@@<.
M! d! t*Tun2 hU' -+Zt S!v+ %hnh -Q -+Zt D!`t
Na$)
Hp$ nay1 n2Qy... thRn2... n$ 0)))1 %hin2 tp!
2]$B
4Kn .9$in giao: V"Kn 2W
7 TNn doanh n2h!`'B
7 T*r s^ %hjnhB
7 !`n thos!B
7 TQ! .hoXn sB
7 s! d!`n -QB
7 Theo 2!fy + >+yvn s Mnc+ %_)B
4Kn n.Mn .9$in giao: V"Kn 4W
7 TNn doanh n2h!`'B
7 T*r s^ %hjnhB
7 !`n thos!B
7 TQ! .hoXn sB
7 s! d!`n -QB
7 Theo 2!fy + >+yvn s Mnc+ %_)B
Ha! ,Nn %a$ .ct %R% S!v+ .hoXn sa+
So%!a-!st Re'+,-!% o" D!etna$
Inde'enden%e 7 ;*eedo$ 7 Ha''!ness
TECHNOGOA: TRANS;ER AAREEMENT
MNo. B.... H9CACN)
7 P+*s+ant to Cha'te* ... the ... o" the C!!- Code.
7 P+*s+ant to 9e%*ee No. <4CP dated
081)1@@<. 7 P+*s+ant to C!*%+-a* No.
4)((B/HCNMT on 41101@@<. M;o* the %ase
-a# 2oe*n!n2 the -a# o" D!etna$) Today1 on ...
May ... !n 0)))1 #e a*eB The t*ans"e*o*B Ms!de A) 7
Na$eB 7 Head O""!%e 7 Te-B 7 A%%o+nt NoB 7
Re'*esentat!es a*eB 7 The a+tho*!Eat!on n+$,e*
M!" any)B
G!%enseesB Ms!de B) 7 Na$eB 7 Head O""!%e 7 Te-B 7
A%%o+nt NoB 7 Re'*esentat!es a*eB 7 The
a+tho*!Eat!on n+$,e* M!" any)B
The t#o s!des '-ed2ed to the "o--o#!n2 a$o+nts
XiQ9 1: XJi t9Eng .9$in giao
7 TNn MsRn2 %hc1 2!X! 'hR' hq+ j%h1 nhn h!`+
hQn2 hoR1 ,j >+yct %pn2 n2h`)B
7 z% S!V$ %pn2 n2h`B
7 /ct >+X R' drn2 %pn2 n2h`B
7 Cn %x %h+yVn 2!ao Ms n ,hn2 ,Xo hP nc+
%_)B
XiQ9 %: C.bt #UEng, npi =9ng eng ng.R
7 Cpn2 n2h` Sst t!N+ %h+gn 2[&
7 Mp tX nP! d+n2 Q tjnh nn2 %wa %pn2 n2h`B
XiQ9 *: +.jm &i &S t.hi .jn .9$in giao
7 Phs$ !B P% >+yvn hay .hpn2 SP% >+yvn& S
drn2 t*on2 -nh th nQo&
7 Thu! hsn %h+yVn 2!aoB 9o ha! ,Nn thoX th+Zn
'h hU' d! thu! hsn $Q S! tTUn2 %h+yVn 2!ao
STU% ,Xo hP Mnc+ %_).
XiQ9 4: Xda Fiim &S tiqn Fp .9$in giao
1. \a S!V$B
0. T!cn SPB
XiQ9 ': -.hi .jn "Lo .Sn. eng ng.R
A*t!%-e 1B to ,e ass!2ned 7 Na$e M!nent!on1
+t!-!ty so-+t!on1 t*ade$a*.1 t*ade se%*et)B 7
Te%hno-o2y ;eat+*esB 7 The *es+-ts o" a''-y!n2
the te%hno-o2yB 7 P+*s+ant to the t*ans"e* Mo"
de2*ee o" '*ote%t!on !" any)B A*t!%-e 0B The
>+a-!ty1 %ontent and te%hno-o2y 7 #hat
te%hno-o2y standa*ds& 7 9es%*!,e the %ontent and
"eat+*es o" the te%hno-o2yB A*t!%-e 4B S%o'e and
t!$e o" de-!e*y 7 S%o'eB Mono'o-y o*
e6%-+s!e& Use o" te**!to*y& 7 T!$e o" de-!e*yB
As the $+t+a--y a2*eed t!$e -!$!t that $at%hes
the o,Ce%t t*ans"e* '*ote%t!on M!" any).
A*t!%-e 8B Go%at!on and s%hed+-e a de-!e*y.
Go%at!onB 0. S%hed+-eB A*t!%-e (B The #a**anty
'e*!od te%hno-o2y A*t!%-e <B P*!%e o" te%hno-o2y
t*ans"e* and 'ay$ent $ethods 7 Rates Aa!-a,-eB
7 Pay$entB A*t!%-e =B The s%o'e and e6tent o"
%on"!dent!a-!ty o" the 'a*t!es A*t!%-e 8B The
o,-!2at!on to '*ote%t the te%hno-o2y o"
%o$$+n!%at!on and the %o$$+n!%at!on
nhan%h+yen A*t!%-e @B A%%e'tan%e o" the *es+-ts
o" te%hno-o2y t*ans"e* A*t!%-e 1)B I$'*oed
te%hno-o2y t*ans"e* o" the t*ans"e*ee o" any
XiQ9 ,: <iT .9$in giao eng ng.R &S p.Urng
t.s t.an. toTn
7 A!R %h+yVn 2!aoB
7 PhT}n2 thx% thanh toRnB
XiQ9 6: +.jm &i, ms Fp giP "N mMt ta T
"Kn
XiQ9 8: Ng.ua &v "Lo .p eng ng.R ta "Kn
giao &S "Kn n.Mn.9$in giao
XiQ9 9: Ng.iRm t.9 kqt 89L .9$in giao eng
ng.R
XiQ9 1@: CLi tiqn eng ng.R .9$in giao ta
"Kn n.Mn .9$in giao
M~! %X! t!cn %wa ,Nn nhZn %h+yVn 2!ao S! d!
%pn2 n2h` %h+yVn 2!ao th+P% >+yvn s^ hq+ %wa
,Nn nhZn %h+yVn 2!ao.
!$'*oe$ent "o* -!%ensees te%hno-o2y t*ans"e* o"
o#ne*sh!' o" the t*ans"e*ee.
XiQ9 11: Cam kqt ta "Kn .9$in gNao &Q FSo
tjo n.Hn #w .o t.w .iRn eng ng.R .9$in
giao
7 S -+Un2B
7 Thu! 2!anB
7 Ch! 'hj SQo tsoB
XiQ9 1%: /9$Qn &S ng.ua &v ta T "Kn
1. BNn %h+yVn 2!ao
7 Ca$ .ct -Q %hw s^ hq+ hU' 'hR' %wa %pn2 n2h`
%h+yVn 2!ao Q !`% %h+yVn 2!ao %pn2 n2h` sW
.hpn2 6$ 'hs$ >+yvn s^ hq+ %pn2 n2h!`' %wa
,ft . ,Nn thx 4 nQo .hR%. BNn %h+yVn 2!ao %_
t*R%h nh!`$1 d! %h! 'hj %wa $[nh1 2!X! >+yct $~!
t*anh %hf' 'hRt s!nh ty !`% %h+yVn 2!ao %pn2
n2h` theo hU' S]n2 nQy.
7 C_ n2ha r hU' tR% %hzt %hW Q 2!i' Sb ,Nn
nhZn %h+yVn 2!ao %hn2 -s! $~! sa 6$ 'hs$
>+yvn s^ hq+ ty ,ft . ,Nn thx 4 nQo .hR%.
7 n2 .e hU' S]n2 %h+yVn 2!ao %pn2 n2h`.
7 NP' th+c %h+yVn 2!ao %pn2 n2h`.
7 C_ >+yvn.hpn2 STU% %h+yVn 2!ao %pn2 n2h`
t*Nn %ho ,Nn thx 4 t*on2 'hs$ ! -nh th >+y
S\nh t*on2 hU' S]n2 nQy.
0. BNn nhZn %h+yVn 2!ao
7 Ca$ .ct %hft -TUn2 sXn 'hg$ sXn 6+ft theo
%pn2 n2h` nhZn %h+yVn nhTUn2 .hpn2 thf' h}n
%hft -TUn2 sXn 'hg$ do ,Nn %h+yVn 2!ao sXn
6+ft. PhT}n2 'hR' SRnh 2!R %hft -TUn2 do ha!
,Nn thoX th+Zn.
7 T*X t!vn %h+yVn 2!ao theo hU' S]n2.
7 /hpn2 STU% 'h{'STU% 'h{' %h+yVn 2!ao -s!
%ho ,Nn thx 4 %pn2 n2h` t*Nn.
7 Ah! %hi 6+ft 6x %pn2 n2h` %h+yVn 2!ao t*Nn
sXn 'hg$.
7 n2 .e hU' S]n2 Mnc+ %_ thoX th+Zn).
A*t!%-e 11B Co$$!t$ents o" the t*ans"e* o"
'e*sonne- t*a!n!n2 "o* the !$'-e$entat!on o"
te%hno-o2y t*ans"e* 7 Q+ant!tyB 7 T!$eB 7 Cost o"
t*a!n!n2B
A*t!%-e 10B R!2hts and o,-!2at!ons o" the 'a*t!es
1. The t*ans"e*o* 7 Co$$!t$ent !s the -e2a-
o#ne* o" the te%hno-o2y t*ans"e* and te%hno-o2y
t*ans"e* #!-- not !n"*!n2e !nd+st*!a- '*o'e*ty
*!2hts o" any othe* th!*d 'a*ty. The t*ans"e*o* !s
*es'ons!,-e1 #!th the!* %osts and sett-e any
d!s'+tes a*!s!n2 "*o$ te%hno-o2y t*ans"e* +nde*
th!s %ont*a%t.
7 Be o,-!2ed to %oo'e*ate %-ose-y and ass!st
-!%ensees a2a!nst any !n"*!n2e$ent o" '*o'e*ty
*!2hts "*o$ any othe* th!*d 'a*ty. 7 Re2!st*at!on o"
te%hno-o2y t*ans"e* %ont*a%ts. 7 Ta6 'ay$ent
te%hno-o2y t*ans"e*. 7 Ha!n2 the *!2ht not
t*ans"e* the te%hno-o2y to th!*d 'a*ty #!th!n the
te**!to*y s'e%!"!ed !n th!s %ont*a%t.
0. G!%ensees 7 Co$$!t$ent to >+a-!ty '*od+%ts
'*od+%ed ,y the t*ans"e* o" te%hno-o2y does not
-o#e* the >+a-!ty o" '*od+%ts '*od+%ed ,y the
t*ans"e*o*. Q+a-!ty assess$ent $ethod sha-- ,e
$+t+a--y a2*eed +'on. 7 T*ans"e* 'ay$ents +nde*
the %ont*a%t. 7 Not a--o#ed 'e*$!tted to t*ans"e*
,a%. to the th!*d 'a*ty te%hno-o2!es. 7 Note the
o*!2!n o" te%hno-o2y t*ans"e* '*od+%ts. 7 S!2n a
%ont*a%t M!" a2*eed).
XiQ9 1*: 1xa Fyi, Fzn. .{ .og .9| "} .Ep
FGng
A*t!%-e 14B To a$end1 s+s'end o* %an%e- the
%ont*a%t1 the Cont*a%t $ay ,e a$ended and
HU' S]n2 %_ thV ,\ sa S!1 , s+n2 theo yN+ %|+
,hn2 n ,Xn %wa $Pt t*on2 %R% ,Nn Q STU% Ss!
d!`n hU' 'hR' %wa %R% ,Nn .e .ct ,hn2 n ,Xn.
CR% S!v+ .hoXn sa S!1 , s+n2 %_ h!`+ -a% ty
thu! S!V$ STU% sa S!.
HU' S]n2 ,\ %hf$ dxt t*on2 %R% t*Tun2 hU' sa+
SyB
7 Hct thu! hsn 2h! t*on2 hU' S]n2.
7 Q+yvn s^ hq+ %pn2 n2h!`' ,\ S[nh %h hoz% h+
,Y.
7 HU' S]n2 .hpn2 tha% h!`n STU% do n2+yNn
nhn ,ft .hX .hRn2 nhTB th!Nn ta!1 ,! %pn21 ,!V+
t[nh1 n! -osn1 %h!cn t*anh Q %R% sa .!`n tT}n2
ta.
XiQ9 14: -rT. n.iRm =o &i p.jm .Ep FGng
BNn nQo ! 'hs$ hU' S]n2 'hX! %h\+ 'hst hU'
S]n2 Q ,]! thTun2 %ho ,Nn .!a toQn ,P th!`t hs!
theo >+y S\nh %wa...
XiQ9 1': L9Mt FiQ9 .{n. .Ep FGng
HU' S]n2 nQy STU% S!v+ %hnh ,^! -+Zt %wa
nTd%...
XiQ9 1,: -rang tSi
M~! t*anh %hf' 'hRt s!nh ty hU' S]n2 nQy 'hX!
STU% 2!X! >+yct t*Td% hct thpn2 >+a thT}n2
-TUn21 hoQ 2!X!. T*on2 t*Tun2 hU' .hpn2 2!X!
>+yct STU% th[ %R% ,Nn %_ >+yvn .!`n Scn t*~n2
tQ! >+% tc ts!...
XiQ9 16: XiQ9 k.oLn t.i .Sn.
HU' S]n2 STU% 6y dan2 t*Nn %} s^ ,[nh Sn2
Q ta n2+y`n. Ha! ,Nn %a$ .ct tha% h!`n Sin2 Q
S|y Sw %R% S!v+ .hoXn t*on2 hU' S]n2 nQy.
HU' S]n2 STU% -Z' thQnh... M,Xn) ,hn2 t!cn2
Anh... M,Xn) ,hn2 t!cn2 D!`t %_ 2!R t*\ nhT nha+.
M! ,Nn 2!q... M,Xn) SV th! hQnh.
s+''-e$ented ,y the #*!tten *e>+est o" one o" the
'a*t!es and -e2a- *e'*esentat!es o" the
Cont*a%t!n2 Pa*t!es !n #*!t!n2. The *e!sed te*$s1
add!t!ona- e""e%t "*o$ t!$e !t !s $od!"!ed. The
%ont*a%t #as te*$!nated !n the "o--o#!n2 %asesB 7
The te*$ s'e%!"!ed !n the %ont*a%t. 7 Ind+st*!a-
'*o'e*ty *!2hts a*e s+s'ended o* %an%e-ed. 7
Cont*a%ts #e*e not a%h!eed d+e to "o*%e $aCe+*e
s+%h as nat+*a- d!saste*s1 st*!.es1 de$onst*at!ons1
*!ots1 #a* and s!$!-a* eents.
A*t!%-e 18B G!a,!-!ty "o* ,*ea%h o" %ont*a%t that
!o-ates the %ont*a%t a2*ee$ent sha-- ,e s+,Ce%t
to "!nes and %o$'ensat!on "o* a-- da$a2e ,eyond
the '*o!s!ons o" ... A*t!%-e 1(B Aoe*n!n2 Ga#
Th!s %ont*a%t !s a %ont*a%t 2oe*ned ,y the -a#s
o" the %o+nt*y ... A*t!%-e 1<B A*,!t*at!on Any
d!s'+te a*!s!n2 "*o$ th!s %ont*a%t $+st ,e sett-ed
"!*st ,y ne2ot!at!on and %on%!-!at!on. In %ase no
sett-e$ent1 the 'a*t!es %an s+e to !nte*nat!ona-
a*,!t*at!on !n ...
A*t!%-e 1=B Te*$ o" %ont*a%t en"o*%e$ent !s ,+!-t
on the ,as!s o" e>+a-!ty and o-+nta*!ness. The
t#o s!des '-ed2ed to %o$'-y #!th and %o$'-ete
the te*$s o" th!s %ont*a%t. The %ont*a%t sha-- ,e
$ade ... MA) !n En2-!sh ... MA) !n the D!etna$ese
-an2+a2e has e>+a- a-+e. Ea%h 'a*ty sha--
.ee' ... MA) to !$'-e$ent.
CPn2 hoQ 6 hP! %hw n2ha D!`t Na$
P% -Z' 7 Ta do 7 Hsnh 'hi%
5[+ X\N< C507mN <I23 CnN< N<5o
MSB.... HCACN)
7 Cn %x %hT}n2... 'h|n... %wa BP -+Zt dn sa.
7 Cn %x n2h\ S\nh s <4CP n2Qy 081)1@@<.
7 Cn %x thpn2 tT s 4)((B/HCNMT n2Qy 41101@@<.
M! d! t*Tun2 hU' -+Zt S!v+ %hnh -Q -+Zt D!`t Na$)
Hp$ nay1 n2Qy... thRn2... n$ 0)))1 %hin2 tp! 2]$B
4Kn .9$in giao: V"Kn 2W
7 TNn doanh n2h!`'B
7 T*r s^ %hjnhB
7 !`n thos!B
7 TQ! .hoXn sB
7 s! d!`n -QB
7 Theo 2!fy + >+yvn s Mnc+ %_)B
4Kn n.Mn .9$in giao: V"Kn 4W
7 TNn doanh n2h!`'B
7 T*r s^ %hjnhB
7 !`n thos!B
7 TQ! .hoXn sB
7 s! d!`n -QB
7 Theo 2!fy + >+yvn s Mnc+ %_)B
Ha! ,Nn %a$ .ct %R% S!v+ .hoXn sa+
XiQ9 1: XJi t9Eng .9$in giao
7 TNn MsRn2 %hc1 2!X! 'hR' hq+ j%h1 nhn h!`+ hQn2 hoR1 ,j >+yct %pn2 n2h`)B
7 z% S!V$ %pn2 n2h`B
7 /ct >+X R' drn2 %pn2 n2h`B
7 Cn %x %h+yVn 2!ao Ms n ,hn2 ,Xo hP nc+ %_)B
XiQ9 %: C.bt #UEng, npi =9ng eng ng.R
7 Cpn2 n2h` Sst t!N+ %h+gn 2[&
7 Mp tX nP! d+n2 Q tjnh nn2 %wa %pn2 n2h`B
XiQ9 *: +.jm &i &S t.hi .jn .9$in giao
7 Phs$ !B P% >+yvn hay .hpn2 SP% >+yvn& S drn2 t*on2 -nh th nQo&
7 Thu! hsn %h+yVn 2!aoB 9o ha! ,Nn thoX th+Zn 'h hU' d! thu! hsn $Q S! tTUn2 %h+yVn 2!ao STU%
,Xo hP Mnc+ %_).
XiQ9 4: Xda Fiim &S tiqn Fp .9$in giao
1. \a S!V$B
0. T!cn SPB
XiQ9 ': -.hi .jn "Lo .Sn. eng ng.R
XiQ9 ,: <iT .9$in giao eng ng.R &S p.Urng t.s t.an. toTn
7 A!R %h+yVn 2!aoB
7 PhT}n2 thx% thanh toRnB
XiQ9 6: +.jm &i, ms Fp giP "N mMt ta T "Kn
XiQ9 8: Ng.ua &v "Lo .p eng ng.R ta "Kn giao &S "Kn n.Mn.9$in giao
XiQ9 9: Ng.iRm t.9 kqt 89L .9$in giao eng ng.R
XiQ9 1@: CLi tiqn eng ng.R .9$in giao ta "Kn n.Mn .9$in giao
M~! %X! t!cn %wa ,Nn nhZn %h+yVn 2!ao S! d! %pn2 n2h` %h+yVn 2!ao th+P% >+yvn s^ hq+ %wa ,Nn
nhZn %h+yVn 2!ao.
XiQ9 11: Cam kqt ta "Kn .9$in gNao &Q FSo tjo n.Hn #w .o t.w .iRn eng ng.R .9$in
giao
7 S -+Un2B
7 Thu! 2!anB
7 Ch! 'hj SQo tsoB
XiQ9 1%: /9$Qn &S ng.ua &v ta T "Kn
1. BNn %h+yVn 2!ao
7 Ca$ .ct -Q %hw s^ hq+ hU' 'hR' %wa %pn2 n2h` %h+yVn 2!ao Q !`% %h+yVn 2!ao %pn2 n2h` sW
.hpn2 6$ 'hs$ >+yvn s^ hq+ %pn2 n2h!`' %wa ,ft . ,Nn thx 4 nQo .hR%. BNn %h+yVn 2!ao %_
t*R%h nh!`$1 d! %h! 'hj %wa $[nh1 2!X! >+yct $~! t*anh %hf' 'hRt s!nh ty !`% %h+yVn 2!ao %pn2 n2h`
theo hU' S]n2 nQy.
7 C_ n2ha r hU' tR% %hzt %hW Q 2!i' Sb ,Nn nhZn %h+yVn 2!ao %hn2 -s! $~! sa 6$ 'hs$ >+yvn
s^ hq+ ty ,ft . ,Nn thx 4 nQo .hR%.
7 n2 .e hU' S]n2 %h+yVn 2!ao %pn2 n2h`.
7 NP' th+c %h+yVn 2!ao %pn2 n2h`.
7 C_ >+yvn.hpn2 STU% %h+yVn 2!ao %pn2 n2h` t*Nn %ho ,Nn thx 4 t*on2 'hs$ ! -nh th >+y S\nh
t*on2 hU' S]n2 nQy.
0. BNn nhZn %h+yVn 2!ao
7 Ca$ .ct %hft -TUn2 sXn 'hg$ sXn 6+ft theo %pn2 n2h` nhZn %h+yVn nhTUn2 .hpn2 thf' h}n %hft
-TUn2 sXn 'hg$ do ,Nn %h+yVn 2!ao sXn 6+ft. PhT}n2 'hR' SRnh 2!R %hft -TUn2 do ha! ,Nn thoX
th+Zn.
7 T*X t!vn %h+yVn 2!ao theo hU' S]n2.
7 /hpn2 STU% 'h{'STU% 'h{' %h+yVn 2!ao -s! %ho ,Nn thx 4 %pn2 n2h` t*Nn.
7 Ah! %hi 6+ft 6x %pn2 n2h` %h+yVn 2!ao t*Nn sXn 'hg$.
7 n2 .e hU' S]n2 Mnc+ %_ thoX th+Zn).
XiQ9 1*: 1xa Fyi, Fzn. .{ .og .9| "} .Ep FGng
HU' S]n2 %_ thV ,\ sa S!1 , s+n2 theo yN+ %|+ ,hn2 n ,Xn %wa $Pt t*on2 %R% ,Nn Q STU% Ss!
d!`n hU' 'hR' %wa %R% ,Nn .e .ct ,hn2 n ,Xn. CR% S!v+ .hoXn sa S!1 , s+n2 %_ h!`+ -a% ty thu!
S!V$ STU% sa S!.
HU' S]n2 ,\ %hf$ dxt t*on2 %R% t*Tun2 hU' sa+ SyB
7 Hct thu! hsn 2h! t*on2 hU' S]n2.
7 Q+yvn s^ hq+ %pn2 n2h!`' ,\ S[nh %h hoz% h+ ,Y.
7 HU' S]n2 .hpn2 tha% h!`n STU% do n2+yNn nhn ,ft .hX .hRn2 nhTB th!Nn ta!1 ,! %pn21 ,!V+ t[nh1
n! -osn1 %h!cn t*anh Q %R% sa .!`n tT}n2 ta.
XiQ9 14: -rT. n.iRm =o &i p.jm .Ep FGng
BNn nQo ! 'hs$ hU' S]n2 'hX! %h\+ 'hst hU' S]n2 Q ,]! thTun2 %ho ,Nn .!a toQn ,P th!`t hs! theo
>+y S\nh %wa...
XiQ9 1': L9Mt FiQ9 .{n. .Ep FGng
HU' S]n2 nQy STU% S!v+ %hnh ,^! -+Zt %wa nTd%...
XiQ9 1,: -rang tSi
M~! t*anh %hf' 'hRt s!nh ty hU' S]n2 nQy 'hX! STU% 2!X! >+yct t*Td% hct thpn2 >+a thT}n2 -TUn21
hoQ 2!X!. T*on2 t*Tun2 hU' .hpn2 2!X! >+yct STU% th[ %R% ,Nn %_ >+yvn .!`n Scn t*~n2 tQ! >+% tc
ts!...
XiQ9 16: XiQ9 k.oLn t.i .Sn.
HU' S]n2 STU% 6y dan2 t*Nn %} s^ ,[nh Sn2 Q ta n2+y`n. Ha! ,Nn %a$ .ct tha% h!`n Sin2 Q S|y
Sw %R% S!v+ .hoXn t*on2 hU' S]n2 nQy.
HU' S]n2 STU% -Z' thQnh... M,Xn) ,hn2 t!cn2 Anh... M,Xn) ,hn2 t!cn2 D!`t %_ 2!R t*\ nhT nha+. M!
,Nn 2!q... M,Xn) SV th! hQnh.
4Kn 2 4Kn 4
-rans#ate into Eng#is.
-rans#ate into Eng#is.
C3N-R2C- (3R -5E +0RC521E 3(
RICE
No.@18>N(A1999
4et)een
<2LL0C; LIMI-ED
;-at A.4;1 Ca+se#ay To#e*1
1< 700 Ca+se#ay Road
Ca+se#ay Bay HONA/ONA
5[+ X\N< M02 4^N <~3
S )18ND;7AG 1@@@
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It .as "een m9t9a##$ agree= to t.e sa#e
an= p9r.ase of rie on t.e terms an=
on=itions as fo##o)s:
1. Co$$od!tyB D!etna$ese Wh!te R!%e
0. S'e%!"!%at!onB
7 B*o.ensB 4(n $a6
7 Mo!st+*eB 181(n
7 ;o*e!2n $atte*B )18n
7 C*o'B 0))@70)1)
4. Q+ant!tyB 1))1))) MT $o*e o* -ess (n
at Se--e*Hs o't!on
8. P*!%eB 0)) US9 'e* $et**!% ton net "o*
J+ne 7 Se'e$,e* 0))@ sh!'$ents1
a7 9+nna2e1 ,a$,oo$at "o*
Sh!'o#ne*HsB+ye*Hs a%%o+nt
,7Sho*e ta--y to ,e at Se--e*Hs a%%o+nt
%7Desse-Hs ta--y to ,e at B+ye*Hs
Sh!'o#ne*Hs a%%o+nt
d7 A-- e6'o*t d+t!es1 ta6es1 -e!ed !n the
%o+nt*y o" o*!2!n to ,e at Se--e*Hs a%%o+nt
e7 A-- !$'o*t d+t!es1 ta6es1 -e!ed !n the
%o+nt*y o" dest!nat!on and o+ts!de D!etna$ sha--
,e "o* B+ye*Hs a%%o+nt.
n2Tu! M+a)
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Cpn2 ty 6+ft nhZ' .hg+ -T}n2 tha% HQ NP!
8) STun2 Ha! Ba T*+n2 1 HQ NP!
DIETNAM
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\a %h S!`n tjn B DINA;OO9 HANOI
M sa+ Sy 2~! -Q n2Tu! BRn)
Ha! ,Nn %n2 S]n2 e S! d! hU' S]n2 $+a
Q ,Rn 2so t*Nn %} s^ S!v+ .!`n nhT sa+B
1. HQn2 hoRB Aso t*On2 D!`t Na$
0. Q+y %R%h 'hg$ %hftB
7 Tf$B t! Sa 4(n
7 Th+ 'h|nB t! Sa 181(n
7 Ts' %hftB t! Sa )18n
7 Aso r $a 1@@871@@@
4. S -TUn2B 1)).))) MT t*Nn dTd! (n
theo sa -aa %h~n %wa n2Tu! ,Rn
8. A!R %XB 0US9 $Pt MTM t\nh) 2!ao hQn2
thRn2 < Scn thRn2 @7 1@@@
a7 G_t hQn21 'hNn %_! tjnh Qo tQ! .hoXn
%wa %hw tQ+ n2Tu! $+a
,7 Ch! 'hj .!V$ .!`n ^ t*Nn %|+ %Xn2 S!
STU% tjnh Qo tQ! .hoXn %wa n2Tu! ,Rn Mdo n2Tu!
,Rn %h\+)
%7 Ch! 'hj .!V$ .!`n t*Nn tQ+ STU% tjnh Qo
tQ! .hoXn %wa n2Tu! $+a %hw tQ+
d7 Tft %X %R% .hoXn th+c 6+ft .hg+ ^ nTd%
6+ft 6x do n2Tu! ,Rn %h\+
e7 Tft %X %R% .hoXn th+c nhZ'1 th+c .hR% ^
nTd% Scn ... Q ^ %R% nTd% ,Nn n2oQ! D!`t Na$ sW
STU% tjnh Qo tQ! .hoXn %wa n2Tu! $+a
(. T!$e o" sh!'$entB 0) 0( days a"te*
GC o'en!n2 date
<. Pa%.!n2B R!%e to ,e 'a%.ed !n s!n2-e C+te
ne# ,a2s o" () .2s net ea%h1 a,o+t ().< .2s
2*oss ea%h1 hand7se#n at $o+th #!th C+te t#!ne
th*ead s+!ta,-e "o* *o+2h hand-!n2 and sea
t*ans'o*tat!on. The Se--e* #!-- s+''-y ).0n o"
ne# C+te ,a2s "*ee o" %ha*2e o+t o" >+ant!ty o"
,a2s sh!''ed
=. Ins+*an%eB To ,e a**an2ed ,y the B+ye*
8. Ins'e%t!on and "+$!2at!on
a7 The %e*t!"!%ate o" >+a-!ty1 #e!2ht and
'a%.!n2 !ss+ed ,y D!na%ont*o- at -oad!n2 'o*t to
,e "!na- and "o* Se--e*Hs a%%o+nt
,7 ;+$!2at!on to ,e e""e%ted on ,oa*d the
esse- a"te* %o$'-et!on o" -oad!n2 #!th e6'enses
to ,e at Se--e*Hs a%%o+nt. B+t e6'enses "o* %*e#
on sho*e d+*!n2 the "+$!2at!on 'e*!od !n%-+d!n2
t*ans'o*tat!on1 a%%o$$odat!on and $ea-s at
hote- "o* Sh!' o#ne*Hs a%%o+nt
%7 T!$e "o* "+$!2at!on not to %o+nt as
-ayt!$e
@. Goad!n2 te*$sB
(. Thu! hsn 2!ao hQn2B 0)70( n2Qy sa+
n2Qy $^ GC
<. Bao ,[B Aso 'hX! STU% S_n2 t*on2 ,ao
Say $d! t*~n2 -TUn2 t\nh $! ,ao ().21 .hoXn2
()1< .2 %X ,[1 .h+ tay ^ $!`n2 ,hn2 %h Say 6e
Sp! thj%h hU' %ho !`% ,% R% Q Zn tX! STun2
,!Vnm n2Tu! ,Rn sW %+n2 %f' )10n ,ao Say $d!
$!n 'hj n2oQ! tn2 s ,ao STU% 6c' t*Nn tQ+.
=. BXo h!V$B N2Tu! $+a sW %h\+
8. /!V$ t*a Q 6pn2 .h_!B
a7 A!fy %hxn2 nhZn %hft -TUn21 t*~n2
-TUn2 Q ,ao ,[ do D!na%ont*o- %f' ^ %Xn2 6c'
hQn2 h_a tjnh %hft %h+n2 thg$ Q %h! 'hj do
n2Tu! ,Rn %h\+
%7 Thu! 2!an 6pn2 .h_! .hpn2 tjnh -Q thu!
2!an 6c' hQn2
@. CR% S!v+ .hoXn v 6c' hQn2B
a. N2Tu! $+a sW thpn2 ,Ro ETA %wa %on
tQ+ Q %R% nP! d+n2 %h! t!ct %wa n_ 1( n2Qy M sa+
.h! tQ+ nh neo) Q th+yvn t*T^n2 sW thpn2 ,Ro
ETA %wa tQ+1 .h! -TUn2 sW STU% 6c' -Nn tQ+ Q
nhqn2 thpn2 t!n %|n th!ct .hR% =08808 2!u
t*Td% .h! tQ+ Scn %Xn2 6c' hQn2
a7 B+ye* sha-- ad!se esse-Hs ETA and !ts
'a*t!%+-a*s 1( days and Ca'ta!n sha-- !n"o*$
esse-Hs ETA1 >+ant!ty to ,e -oaded and othe*
ne%essa*y !$"o*$at!on =08808 ho+*s ,e"o*e the
esse-Hs a**!a- at -oad!n2 'o*t
,7 Gayt!$e to %o$$en%e at 1.'$ !" N.O.R
2!en ,e"o*e noon and at 8. AM ne6t #o*.!n2
day !" NOR 2!en !n the a"te*noon d+*!n2 o""!%e
ho+*s. In %ase1 esse- #a!t!n2 "o* ,e*th d+e to
%on2est!on1 t!$e %o$$en%e to %o+nt =0 ho+*s
a"te* N.O.R s+,$!tted
%7 Goad!n2 *ateB 8)) MT 'e* #eathe*
#o*.!n2 day o" 08 %onse%+t!e ho+*s S+ndays1
ho-!days e6%e'ted een !" +sed1 ,ased on the +se
o" at -east "o+* to "!e no*$a- #o*.!n2
hat%hesho-ds and a-- %*anes de**!%.s and
#!n%hes aa!-a,-e !n 2ood o*de*1 !" -ess than
'*o*ata
d7 Se--e* sha-- a**an2e one sa"e ,e*th o" one
sa"e 'o*t "o* the esse- o" 1)1))) 7 0)1))) MT
%a'a%!ty to -oad the %a*2o
e7 T!$e ,et#een 1=.)) PM on Sat+*day
and the day '*e%eed!n2 a ho-!day +nt!- 8.AM ne6t
#o*.!n2 day not to %o+nt as -ayt!$e een !" +sed
"7 Be"o*e s+,$!tt!n2 N.O.R.1 the esse-
$+st ,e !n "*ee '*at!>+e. I$$ed!ate-y a"te* esse-
at ,e*th1 %a'ta!n sha-- *e>+est D!na%ont*o- to
!ns'e%t the hat%hesho-ds and !ss+e a %et!"!%ate
%e*t!"y!n2 the hat%hes ho-ds a*e %-ean1 d*y1 "*ee
"*o$ ha*$"+- "a%t!ons and s+!ta,-e "o* 2oods
-oad!n2 #!th s+%h e6'ensses to ,e at sh!' o#ne*Hs
a%%o+nt and t!$e not to %o+nt as -ayt!$e
27 9e$+**a2e9es'at%h o" any1 to ,e as 'e*
CP *ate
B+t $a6!$+$ 81))) 01))) US9 'e* day
o* '*o*ata and to ,e sett-ed d!*e%ted-y ,et#een
Se--e* and B+ye* #!th!n @) days a"te* BG date
h7 ;o* the '+*'ose o" o,ta!n!n2 sh!''!n2
9o%+$ents s+%h asB
7 Co$$e*%!a- Ino!%es
7 Cet!"!%ate o" >+a-!ty1 #e!2ht and 'a%.!n2
7 Ce*t!"!%ate o" o*!2!n
The *es'ons!,-e 'a*ty sha-- Ca,-e Te-e6
;a6 ad!s!n2 sh!'$ent 'a*t!%+-a*s #!th!n 08
ho+*s a"te* %o$'-et!on o" -oad!n2
In o*de* "o* the B+ye* to o,ta!n !ns+*an%e1
a B!-- o" Gad!n2 sha-- ,e !ss+ed !$$ed!ate-y a"te*
%o$'-et!on o" -oad!n2 and ,e"o*e "+$!2at!ooon
and '*o!ded !$$ed!ate-y to the B+ye*
!7 In %ase1 %a*2o !s *eady "o* sh!'$ent as
s%hed+-ed !n th!s %ont*a%t1 ,+t the B+ye* "a!-s to
no$!nate the ese- to -oad1 then a-- *!s.s1
da$a2es1 and asso%!ated e6'enses "o* %a*2o to ,e
,o*ne ,y the B+ye* ,ased on the Se--e*Hs a%t+a-
%-a!$. In the eent no %a*2o !s aa!-a,-e to ,e
-oaded on the no$!nated esse- at the -oad!n2
'o*t1 then dead "*e!2ht to ,e 'a!d ,y Se--e* ,ased
on B+ye*Hs a%t+a- %-a!$ and the B+ye* #!--
,7 Thu! 2!an 6c' hQn2 ,Ot SQ+ tjnh ty 1h
t*Ta nc+ NOR STU% t*ao t*Td% ,+! t*Ta Q ty 8h
sRn2 %wa n2Qy -Q$ !`% t!c' theo nc+ nhT NOR
STU% t*ao Qo ,+! %h!v+ t*on2 2!u -Q$ !`%1
t*on2 t*Tun2 hU' tQ+ SU! SV thX neo [ %Xn2 tO%
n2hWn th[ thu! 2!an 6c' hQn2 STU% tjnh sa+ =0 2!u
.V ty .h! t*ao NOR
%7 T% SP 6c' hQn2B 8)) MT $! n2Qy -Q$
!`% -!Nn tr% 08h thu! t!ct %ho 'h{' -Q$ !`% 1 %hw
nhZt1 n2Qy n2h STU% t*y *a thZ$ %hj nc+ %_ s
drn21 t*Nn %} s^ %_ jt nhft ty 8 Scn ( h|$
tQ+h|$ hQn2 -Q$ !`% ,[nh thTun2 Q tft %X %R%
%|n %g+%|n t*r% Q %+Pn dy tu! sn sQn2 t*on2
t*sn2 thR! tt1 nc+ jt h}n th[ tjnh theo t -`
d7 N2Tu! ,Rn sW th+ 6c' $Pt S\a S!V$ ,Y
neo an toQn ts! $Pt %Xn2 an toQn %ho %on tQ+ %_
sx% %hxa ty 1).))) MT 7 0).))) MT SV ,% hQn2
e7 /hoXn2 thu! 2!an ty 1=h %h!v+ thx ,Xy
Q n2Qy t*Td% $Pt n2Qy n2h %ho Scn 8 sRn2 %wa
n2Qy -Q$ !`% t!c' theo .hpn2 tjnh -Q thu! 2!an
6c' hQn2 thZ$ %hj %_ s drn2
"7 T*Td% .h! t*ao NOR1 %on tQ+ 'hX! %_
2!fy >+R %Xn21 n2ay sa+ .h! tQ+ %Z' %Xn2 M ,Y
neo) 1 th+yvn t*T^n2 sW yN+ %|+ D!na%ont*o- .!V$
t*a %R% h|$ tQ+h|$ hQn2 Q %f' 2!fy %hxn2
nhZn %R% h|$ tQ+h|$ hQn2 ss%h .hp1 .hpn2 %_
tR% nhn 2y hs! Q thj%h hU' SV %h^ -T}n2 tha%
Q nhqn2 %h! 'hj nhT Zy sW STU% tjnh Qo tQ!
.hoXn %wa %hw tQ+ Q thu! 2!an .hpn2 tjnh -Q thu!
2!an 6c' hQn2
27 Phst 6c' hQn2 %hZ$ thT^n2 6c' hQn2
nhanh nc+ %_1 sW theo nhT $x% >+y S\nh t*on2
hU' S]n2 th+N tQ+ %h+ycnm nhTn2 t! Sa -Q
8.)))0.))) US9 $Pt n2Qy hoz% tjnh theo t -`
Q 'hX! STU% 2!X! >+yct M thanh toRn ) t*a% t!c'
2!qa n2Tu! $+a Q n2Tu! ,Rn t*on2 n2 @) n2Qy
.V ty n2Qy .j BG
h7 V %_ STU% nhqn2 %hxn2 ty 2!ao hQn2
nhTB
7CR% hoR S}n thT}n2 $s!
7 A!fy %hxn2 nhZn %hft -TUn21 t*~n2 -TUn2
Q ,ao ,[
7 A!fy %hxn2 nhZn 6+ft 6x
BNn %_ t*R%h nh!`$ 'hX! thpn2 ,Ro %R% %h!
t!ct v 2!ao hQn2 ,hn2 S!`n tjn te-e6"a6 t*on2
n2 08h sa+ .h! hoQn thQnh 2!ao hQn2
DZn S}n sW STU% %f' n2Qy sa+ .h! hoQn
thQnh !`% 2!ao hQn2 Q t*Td% .h! 6pn2 .h_! Q
STU% 2!ao n2ay %ho n2Tu! $+a SV $+a ,Xo h!V$
!7 T*on2 t*Tun2 hU' hQn2 hoR S sn sQn2
SV 6c' -Nn tQ+ nhT S STU% da S\nh t*on2 hU'
S]n2 nQy nhTn2 n2Tu! $+a .hpn2 %h S\nh tQ+
SV ,% hQn2 th[ tft %X *w! *o1 th!`t hs!1 nhqn2 %h!
'hj %_ -!Nn >+an Scn hQn2 hoR do n2Tu! $+a %h\+
t*Nn %} s^ S! ,]! thTun2 tha% tc %wa n2Tu!
,Rn mn2TU% -s!1 nc+ .hpn2 hQn2 hoR SV ,% -Nn
tQ+ S STU% %h S\nh ^ %Xn2 ,% hQn21 th[ %Td%
.hn2 sW do n2Tu! ,Rn t*X t*Nn %^ s^ ,Xn S! ,]!
s+,$!t the "o--o#!n2 do%+$ents to D!et%o$,an.
"o* *e%e!!n2 P.BB
M t!$e %o+nted B 0) 70( days "*o$ GC o'en!n2
date)B
7 N.O.R. #!th se--e*Hs s!2nat+*e
7 Re'o*t s!2ned ,y the Ca'ta!n and the
Se--e* %on"!*$!n2 that the esse- has a-*eady
a**!ed at the 'o*t to *e%e!e the
%a*2o ,+t the Se--e* has no %a*2o to -oad
7 D!et%o$,an.Hs %on"!*$at!on
thTun2 tha% tc %wa n2Tu! $+a Q n2Tu! $+a sW
6+ft t*[nh nhqn2 %hxn2 ty sa+ %ho D!et%o$,an.
SV nhZn P.B. M thu! 2!an STU% tjnh ty 0)70( n2Qy
.V ty n2Qy $^ GC)
7 NOR %_ %hq .j %wa n2Tu! ,Rn
7 B!Nn ,Xn STU% .j 2!qa th+yvn t*T^n2 Q n2Tu!
,Rn 6R% nhZn *hn2 %on tQ+ S STU% %h S\nh S
Scn %Xn2 6c' hQn2 SV nhZn s hQn2 t*on2 hU'
S]n2 nhTn2 n2Tu! ,Rn .hpn2 %_ hQn2 SV ,% -Nn
tQ+ 6R% nhZn %wa D!et%o$,an.
1). Pay$entB
a7 A"te* s!2n!n2 the %ont*a%t1 the B+ye* o*
the B+ye*Hs no$!nee M SH:E GIANM H/)
MANU;ACTURINA CO.GT9 OR OTHER
NOMINEE) #!-- te-e6 as.!n2 the Se--e* to o'en
P.B. o" 1n o" tota- GC a$oo+nt at D!et%o$,an.
Hano! #!th!n t#o days the*eo" the Se--e* o'en
P.B. and !n "o*$ the B+ye*1 then1 "o+* days a"te*
*e%e!!n2 D!et%o$,an. Hs %on"!*$at!on1 the
B+ye* #!-- o'en a te-e2*a'h!%1 !**eo%a,-e and
%on"!*$ed GC #h!%h !s !n %on"o*$!ty #!th th!s
%ont*a%t ,y an !nte*nat!ona- "!*st %-ass ,an. at
s!2ht #!th T.T.R. a%%e'ta,-e "o* 8)1))) MT !n
"ao+* o" D!na"ood Hano! th*o+2h the Ban. "o*
;o*e!2n T*ade o" D!etna$
;o* <)1))) MT the B+ye* o* B+ye*Hs
no$!nee #!-- o'en a te-e2*a'h!%1 !**eo%a,-e and
t*ans"e*a,-e at s!2ht GC #h!%h !s !n %on"o*$!ty
#!th th!s %ont*a%t #!th T.T.R. a%%e'a,-e. In %ase1
the Se--e* *e>+ests the %on"!*$at!on o" GC1 the
GC #!-- ,e %on"!*$ed "o* Se--e*Hs a%%o+nt
In the eent that the B+ye* "a!-s to o'en
GC "o+* days a"te* *e%e!!n2 %on"!*$at!on "*o$
D!et%o$,an. then the Se--e* sha-- %o--e%t P.B.
"*o$ the D!et%o$,an. and then the %ont*a%t !s
a+to$at!%a--y %an%e--ed
The Se--e* #!-- %o--e%t the P.B. a2a!nst
'*esentat!on o" sh!''!n2 do%+$ents at
D!et%o$,an.
,7 P*esentat!on o" the "o--o#!n2 do%+$ents
to the Ban. "o* ;o*e!2n T*ade o" D!etna$1
'aya,-e #!th!n 47( ,an.!n2 days a"te* *e%!e't o"
the te-e6 "*o$ D!et%o$,an. %et!"y!n2 that
do%+$ents hae ,een %he%.ed !n %on"o*$!ty
#!th the GC te*$sB
7 ;+-- set o" C-ean on ,oa*d BG !n th*ee
M 4) o*!2!na-s $a*.ed ;*e!2ht to %o--e%t
7 Co$$e*%!a- !no!%e !n th*ee M4) "o-ds
7 Ce*t!"!%ates o" >+a-!ty1 #e!2ht and
'a%.!n2 !ss+ed ,y D!na%onnt*o- to ,e "!na- at
-oad!n2 'o*t !n s!6 M <) "o-ds
7 Ce*t!"!%ate o" "+$!2at!on !ss+ed ,y
DIetna$ Cha$,e* o" Co$$e*%e !n s!6 M<) "o-ds
7 Phytosan!ta*y %e*t!"!%ate !ss+ed ,y the
Co$'etent a+tho*!ty o" D!etna$ !n s!6 M<) "o-ds
7 Ca,-e Te-e6 ;a6 ad!s!n2 sh!'$ent
Pa*t!%+-a*s #!th!n 08 ho+*s a"te* %o$'-et!on o"
1). Thanh toRnB
a7 Sa+ .h! .j .ct hU' S]n2 nQy1 n2Tu! $+a
hoz% n2Tu! ,Rn STU% %h S\nh %wa n2Tu! $+a
M SH:E GIANMH/)7 MANU;ATURINA
CO.GT9 hoz% n2Tu! STU% %h S\nh .hR%) sW te-e6
Sv n2h\ n2Tu! ,Rn $^ P.B. d! 1n tn2 2!R t*\
GC ts! D!et%o$,an. HQ NP! t*on2 n2 0 n2Qy
n2Tu! ,Rn sW $^ P.B. Q thpn2 ,Ro %ho n2Tu!
$+a1 sa+ S_1 8 n2Qy sa+ .h! nhZn STU% 6R% nhZn
%wa D!et%o$,an.1 n2Tu! $+a sW $^ $Pt GC
STU% 6R% nhZn .hpn2 h+ n2an2 ,hn2 S!`n tjn
'h hU' d! hU' S]n2 nQy ts! n2n hQn2 >+% tc
hsn2 nhft thanh toRn ,hn2 T.T.R %_ thV %hf'
nhZn STU% S! d! 8).))) MT %ho D!na"ood
Hano! hT^n2 >+a n2n hQn2 N2os! thT}n2 D!`t
Na$
! d! <).))) MT n2Tu! ,Rn %n2 %hf'
nhZn *hn2 n2Tu! $+a hoz% n2Tu! %h S\nh %wa
n2Tu! $+a sW $^ $Pt thT tjn drn2 thanh toRn
n2ay %_ thV %h+yVn nhTUn2 STU% .hpn2 h+
n2an2 ,hn2 S!`n ,Ro .hpn2 'h hU' d! hU'
S]n2 nQy %_ thV %hf' nhZn d! %h+yVn t!vn ,hn2
S!`n. t*on2 t*Tun2 hU' n2Tu! ,Rn yN+ %|+ 6R%
nhZn GC1 GC sW STU% 6R% nhZn d! %h! 'hj %wa
n2Tu! ,Rn.
T*on2 t*Tun2 hU' ,n n2Qy .V ty n2Qy
n2Tu! $+a nhZn STU% 6R% nhZn %wa
D!et%o$,an.1 nhTn2 GC .hpn2 STU% $^ th[
n2Tu! ,Rn sW th+ h]! P.B ty D!et%o$,an. Q sa+
S_ hU' S]n2 ta SPn2 STU% h+ ,Y.
N2Tu! ,Rn sW th+ h]! P.B t*Nn %} s^ 6+ft
t*[nh %R% %hxn2 ty Zn tX! %ho D!et%o$,an.
,7 D!`% 6+ft t*[nh nhqn2 %hxn2 ty sa+ Sy
%ho n2n hQn2 N2os! thT}n2 D!`t Na$1 STU%
thanh toRn t*on2 n2 47( n2Qy -Q$ !`% %wa
n2n hQn2 sa+ .h! nhZn STU% ,x% te-e6 S STU%
.!V$ t*a ty D!et%o$,an. %hxn2 tY *hn2 nhqn2
%hxn2 ty nQy S STU% .!V$ t*a Q 'h hU' d!
%R% S!v+ .hoXn %wa GC
7 MPt ,P S|y Sw Zn S}n ss%h S 6c' hQn2
-Nn tQ+ ,a ,Xn 2% %_ 2h! CTd% 'hj t*X sa+
7 HoR S}n thT}n2 $s! -Q$ thQnh ,a ,Xn
7 A!fy %hxn2 nhZn %hft -TUn21 t*~n2 -TUn2
Q ,ao ,[ do D!na%ont*o- %f' ^ %Xn2 ,% hQn2 sW
%_ 2!R t*\ 'hR' -j %+! %n2 STU% -Q$ thQnh sR+
,Xn
7 Nhqn2 %h! t!ct thpn2 ,Ro 2! hQn2 ,hn2
-oad!n2
11. ;o*%e MaCe+*eB
The ;o*%e MaCe+*eM e6e$'t!ons) %-a+se o"
the !nte*nat!ona- Cha$,e* o" Co$$e*%e MICC
'+,-!%at!on No. 801) !s he*e,y !n%o*'o*ated on
th!s %ont*a%t
10. A*,!t*at!onB
Any d!s%*e'an%!es ando* d!s'+tes a*!s!n2
o+t o* !n %onne%t!on #!th th!s %ont*a%t not sett-ed
a$!%a,-y sha-- ,e *e"e**ed to A*,!t*at!on
a%%o*dan%e #!th the R+-es and P*a%t!%es o" the
Inte*nat!ona- Cha$,e* o" Co$$e*%e !n Pa*!s o*
s+%h othe* '-a%e a2*eed ,y ,oth s!des
14. Othe* te*$sB
Any a$end$ent o" the te*$s and
%ond!t!ons o" th!s %ont*a%t $+st ,e a2*eed to ,y
,oth s!des !n #*!tt!n2
Th!s %ont*a%t !s $ade !n )< o*!2!na-s !n the
En2-!sh -an2+a2e1 th*ee "o* ea%h 'a*ty
Th!s !s s+,Ce%t to the B+ye*Hs "!na-
%on"!*$at!on ,y te-e6 MJ+ne 18th1 1@@@ -atest)
Made !n Hano!1 on @th J+ne1 1@@@
S!`n tjnTe-e6;a6 t*on2 n2 08h sa+ .h! hoQn
thQnh !`% ,% hQn2
11. Bft .hX .hRn2
!v+ .hoXn ,ft .hX .hRn2 %wa Phn2
ThT}n2 $s! >+% tc M ICC fn 'hg$ s 801) theo
hU' S]n2 nQy STU% .ct hU' thQnh 1 ,P 'hZn
t*on2 hU' S]n2 nQy
10. T*~n2 tQ!B
Bft %x sa .hR% ,!`t Qhoz% t*anh %hf' nQo
'hRt s!nh ty Q t*on2 >+an h` d! hU' S]n2 nQy
$Q .hpn2 STU% 2!X! >+yct ,hn2 thT}n2 -TUn2 sW
'hX! STa *a 6 theo -+Zt Q tZ' >+Rn t*~n2 tQ! %wa
Phn2 ThT}n2 Ms! >+% tc ^ Pa*!s hU% nhqn2
n}! .hR% do ha! ,Nn thoX th+Zn
14. CR% S!v+ .hoXn .hR%B
Bft %x sa sa S! S!v+ .hoXn Q S!v+ .!`n
nQo %wa hU' S]n2 nQy 'hX! STU% ha! ,Nn thoX
th+Zn ,hn2 n ,Xn
HU' S]n2 nQy STU% -Q$ thQnh < ,Xn 2%
,hn2 t!cn2 Anh1 4 ,Xn %ho $! ,Nn
HU' S]n2 nQy 'hr th+P% Qo 6R% nhZn %+!
%n2 %wa n2Tu! $+a ,hn2 te-e6 M 18 thRn2 < n$
1@@@ -Q $+Pn nhft)
TU% -Q$ ^ HQ NP!1 n2Qy @ thRn2 < n$ 1@@@
C3N-R2C- (3R -5E +0RC521E 3( RICE
No.@18>N(A1999
4et)een
<2LL0C; LIMI-ED
;-at A.4;1 Ca+se#ay To#e*1
1< 700 Ca+se#ay Road
Ca+se#ay Bay HONA/ONA
Te-B 88=@@))1 8@=<800B ;a6B 884@0))
M he*e!na"te* %a--ed the B+ye*)
2n=
52N3I (33D EB+3R- IM+3R- C3M+2N7
8) Ha! Ba T*+n2 St*eet1 Hano! DIETNAM
Te-B 408@@@1 Te-e6B 4088@0 7 DN; DT
E$a!- B WWW.DINA;OO9HN:ahoo.%o$ Mhe*e!na"te* %a--ed the Se--e*)
It .as "een m9t9a##$ agree= to t.e sa#e an= p9r.ase of rie on t.e terms an= on=itions
as fo##o)s:
1. Co$$od!tyB D!etna$ese Wh!te R!%e
0. S'e%!"!%at!onB
7 B*o.ensB 4(n $a6
7 Mo!st+*eB 181(n
7 ;o*e!2n $atte*B )18n
7 C*o'B 0))@70)1)
4. Q+ant!tyB 1))1))) MT $o*e o* -ess (n at Se--e*Hs o't!on
8. P*!%eB 0)) US9 'e* $et**!% ton net "o* J+ne 7 Se'e$,e* 0))@ sh!'$ents1
a7 9+nna2e1 ,a$,oo$at "o* Sh!'o#ne*HsB+ye*Hs a%%o+nt
,7Sho*e ta--y to ,e at Se--e*Hs a%%o+nt
%7Desse-Hs ta--y to ,e at B+ye*Hs Sh!'o#ne*Hs a%%o+nt
d7 A-- e6'o*t d+t!es1 ta6es1 -e!ed !n the %o+nt*y o" o*!2!n to ,e at Se--e*Hs a%%o+nt
e7 A-- !$'o*t d+t!es1 ta6es1 -e!ed !n the %o+nt*y o" dest!nat!on and o+ts!de D!etna$ sha-- ,e "o*
B+ye*Hs a%%o+nt.
(. T!$e o" sh!'$entB 0) 7 0( days a"te* GC o'en!n2 date
<. Pa%.!n2B R!%e to ,e 'a%.ed !n s!n2-e C+te ne# ,a2s o" () .2s net ea%h1 a,o+t ().< .2s 2*oss
ea%h1 hand7se#n at $o+th #!th C+te t#!ne th*ead s+!ta,-e "o* *o+2h hand-!n2 and sea t*ans'o*tat!on.
The Se--e* #!-- s+''-y ).0n o" ne# C+te ,a2s "*ee o" %ha*2e o+t o" >+ant!ty o" ,a2s sh!''ed
=. Ins+*an%eB To ,e a**an2ed ,y the B+ye*
8. Ins'e%t!on and "+$!2at!on
a7 The %e*t!"!%ate o" >+a-!ty1 #e!2ht and 'a%.!n2 !ss+ed ,y D!na%ont*o- at -oad!n2 'o*t to ,e
"!na- and "o* Se--e*Hs a%%o+nt
,7 ;+$!2at!on to ,e e""e%ted on ,oa*d the esse- a"te* %o$'-et!on o" -oad!n2 #!th e6'enses to
,e at Se--e*Hs a%%o+nt. B+t e6'enses "o* %*e# on sho*e d+*!n2 the "+$!2at!on 'e*!od !n%-+d!n2
t*ans'o*tat!on1 a%%o$$odat!on and $ea-s at hote- "o* Sh!' o#ne*Hs a%%o+nt
%7 T!$e "o* "+$!2at!on not to %o+nt as -ayt!$e
@. Goad!n2 te*$sB
a7 B+ye* sha-- ad!se esse-Hs ETA and !ts 'a*t!%+-a*s 1( days and Ca'ta!n sha-- !n"o*$ esse-Hs
ETA1 >+ant!ty to ,e -oaded and othe* ne%essa*y !$"o*$at!on =08808 ho+*s ,e"o*e the esse-Hs
a**!a- at -oad!n2 'o*t
,7 Gayt!$e to %o$$en%e at 1.'$ !" N.O.R 2!en ,e"o*e noon and at 8. AM ne6t #o*.!n2 day !"
NOR 2!en !n the a"te*noon d+*!n2 o""!%e ho+*s. In %ase1 esse- #a!t!n2 "o* ,e*th d+e to %on2est!on1
t!$e %o$$en%e to %o+nt =0 ho+*s a"te* N.O.R s+,$!tted
%7 Goad!n2 *ateB 8)) MT 'e* #eathe* #o*.!n2 day o" 08 %onse%+t!e ho+*s S+ndays1 ho-!days
e6%e'ted een !" +sed1 ,ased on the +se o" at -east "o+* to "!e no*$a- #o*.!n2 hat%hesho-ds and a--
%*anes de**!%.s and #!n%hes aa!-a,-e !n 2ood o*de*1 !" -ess than '*o*ata
d7 Se--e* sha-- a**an2e one sa"e ,e*th o" one sa"e 'o*t "o* the esse- o" 1)1))) 7 0)1))) MT
%a'a%!ty to -oad the %a*2o
e7 T!$e ,et#een 1=.)) PM on Sat+*day and the day '*e%eed!n2 a ho-!day +nt!- 8.AM ne6t
#o*.!n2 day not to %o+nt as -ayt!$e een !" +sed
"7 Be"o*e s+,$!tt!n2 N.O.R.1 the esse- $+st ,e !n "*ee '*at!>+e. I$$ed!ate-y a"te* esse- at
,e*th1 %a'ta!n sha-- *e>+est D!na%ont*o- to !ns'e%t the hat%hesho-ds and !ss+e a %et!"!%ate %e*t!"y!n2
the hat%hes ho-ds a*e %-ean1 d*y1 "*ee "*o$ ha*$"+- "a%t!ons and s+!ta,-e "o* 2oods -oad!n2 #!th s+%h
e6'ensses to ,e at sh!' o#ne*Hs a%%o+nt and t!$e not to %o+nt as -ayt!$e
27 9e$+**a2e9es'at%h o" any1 to ,e as 'e* CP *ate
B+t $a6!$+$ 81))) 01))) US9 'e* day o* '*o*ata and to ,e sett-ed d!*e%ted-y ,et#een Se--e*
and B+ye* #!th!n @) days a"te* BG date
h7 ;o* the '+*'ose o" o,ta!n!n2 sh!''!n2 9o%+$ents s+%h asB
7 Co$$e*%!a- Ino!%es
7 Cet!"!%ate o" >+a-!ty1 #e!2ht and 'a%.!n2
7 Ce*t!"!%ate o" o*!2!n
The *es'ons!,-e 'a*ty sha-- Ca,-e Te-e6 ;a6 ad!s!n2 sh!'$ent 'a*t!%+-a*s #!th!n 08 ho+*s
a"te* %o$'-et!on o" -oad!n2
In o*de* "o* the B+ye* to o,ta!n !ns+*an%e1 a B!-- o" Gad!n2 sha-- ,e !ss+ed !$$ed!ate-y a"te*
%o$'-et!on o" -oad!n2 and ,e"o*e "+$!2at!ooon and '*o!ded !$$ed!ate-y to the B+ye*
!7 In %ase1 %a*2o !s *eady "o* sh!'$ent as s%hed+-ed !n th!s %ont*a%t1 ,+t the B+ye* "a!-s to
no$!nate the ese- to -oad1 then a-- *!s.s1 da$a2es1 and asso%!ated e6'enses "o* %a*2o to ,e ,o*ne ,y
the B+ye* ,ased on the Se--e*Hs a%t+a- %-a!$. In the eent no %a*2o !s aa!-a,-e to ,e -oaded on the
no$!nated esse- at the -oad!n2 'o*t1 then dead "*e!2ht to ,e 'a!d ,y Se--e* ,ased on B+ye*Hs a%t+a-
%-a!$ and the B+ye* #!-- s+,$!t the "o--o#!n2 do%+$ents to D!et%o$,an. "o* *e%e!!n2 P.BB
M t!$e %o+nted B 0) 70( days "*o$ GC o'en!n2 date)B
7 N.O.R. #!th se--e*Hs s!2nat+*e
7 Re'o*t s!2ned ,y the Ca'ta!n and the Se--e* %on"!*$!n2 that the esse- has a-*eady a**!ed at
the 'o*t to *e%e!e the
%a*2o ,+t the Se--e* has no %a*2o to -oad
7 D!et%o$,an.Hs %on"!*$at!on
1). Pay$entB
a7 A"te* s!2n!n2 the %ont*a%t1 the B+ye* o* the B+ye*Hs no$!nee M SH:E GIANM H/)
MANU;ACTURINA CO.GT9 OR OTHER NOMINEE) #!-- te-e6 as.!n2 the Se--e* to o'en P.B. o"
1n o" tota- GC a$oo+nt at D!et%o$,an. Hano! #!th!n t#o days the*eo" the Se--e* o'en P.B. and !n
"o*$ the B+ye*1 then1 "o+* days a"te* *e%e!!n2 D!et%o$,an. Hs %on"!*$at!on1 the B+ye* #!-- o'en a
te-e2*a'h!%1 !**eo%a,-e and %on"!*$ed GC #h!%h !s !n %on"o*$!ty #!th th!s %ont*a%t ,y an
!nte*nat!ona- "!*st %-ass ,an. at s!2ht #!th T.T.R. a%%e'ta,-e "o* 8)1))) MT !n "ao+* o" D!na"ood
Hano! th*o+2h the Ban. "o* ;o*e!2n T*ade o" D!etna$
;o* <)1))) MT the B+ye* o* B+ye*Hs no$!nee #!-- o'en a te-e2*a'h!%1 !**eo%a,-e and
t*ans"e*a,-e at s!2ht GC #h!%h !s !n %on"o*$!ty #!th th!s %ont*a%t #!th T.T.R. a%%e'a,-e. In %ase1 the
Se--e* *e>+ests the %on"!*$at!on o" GC1 the GC #!-- ,e %on"!*$ed "o* Se--e*Hs a%%o+nt
In the eent that the B+ye* "a!-s to o'en GC "o+* days a"te* *e%e!!n2 %on"!*$at!on "*o$
D!et%o$,an. then the Se--e* sha-- %o--e%t P.B. "*o$ the D!et%o$,an. and then the %ont*a%t !s
a+to$at!%a--y %an%e--ed
The Se--e* #!-- %o--e%t the P.B. a2a!nst '*esentat!on o" sh!''!n2 do%+$ents at D!et%o$,an.
,7 P*esentat!on o" the "o--o#!n2 do%+$ents to the Ban. "o* ;o*e!2n T*ade o" D!etna$1 'aya,-e
#!th!n 47( ,an.!n2 days a"te* *e%!e't o" the te-e6 "*o$ D!et%o$,an. %et!"y!n2 that do%+$ents hae
,een %he%.ed !n %on"o*$!ty #!th the GC te*$sB
7 ;+-- set o" C-ean on ,oa*d BG !n th*ee M 4) o*!2!na-s $a*.ed ;*e!2ht to %o--e%t
7 Co$$e*%!a- !no!%e !n th*ee M4) "o-ds
7 Ce*t!"!%ates o" >+a-!ty1 #e!2ht and 'a%.!n2 !ss+ed ,y D!na%onnt*o- to ,e "!na- at -oad!n2 'o*t
!n s!6 M <) "o-ds
7 Ce*t!"!%ate o" "+$!2at!on !ss+ed ,y DIetna$ Cha$,e* o" Co$$e*%e !n s!6 M<) "o-ds
7 Phytosan!ta*y %e*t!"!%ate !ss+ed ,y the Co$'etent a+tho*!ty o" D!etna$ !n s!6 M<) "o-ds
7 Ca,-e Te-e6 ;a6 ad!s!n2 sh!'$ent Pa*t!%+-a*s #!th!n 08 ho+*s a"te* %o$'-et!on o" -oad!n2
11. ;o*%e MaCe+*eB
The ;o*%e MaCe+*eM e6e$'t!ons) %-a+se o" the !nte*nat!ona- Cha$,e* o" Co$$e*%e MICC
'+,-!%at!on No. 801) !s he*e,y !n%o*'o*ated on th!s %ont*a%t
10. A*,!t*at!onB
Any d!s%*e'an%!es ando* d!s'+tes a*!s!n2 o+t o* !n %onne%t!on #!th th!s %ont*a%t not sett-ed
a$!%a,-y sha-- ,e *e"e**ed to A*,!t*at!on a%%o*dan%e #!th the R+-es and P*a%t!%es o" the Inte*nat!ona-
Cha$,e* o" Co$$e*%e !n Pa*!s o* s+%h othe* '-a%e a2*eed ,y ,oth s!des
14. Othe* te*$sB
Any a$end$ent o" the te*$s and %ond!t!ons o" th!s %ont*a%t $+st ,e a2*eed to ,y ,oth s!des !n
#*!tt!n2
Th!s %ont*a%t !s $ade !n )< o*!2!na-s !n the En2-!sh -an2+a2e1 th*ee "o* ea%h 'a*ty
Th!s !s s+,Ce%t to the B+ye*Hs "!na- %on"!*$at!on ,y te-e6 MJ+ne 18th1 1@@@ -atest)
Ma+e in Hanoi, on /t* 0!ne, 1///
(or t.e 1e##er
Diretor
Vsigne=Asea#e=W
Ng9$en D9
(or t.e 49$er
Managing Diretor
Vsigne=W
1.7.C.an
HU' S]n2 $+a ,Rn 2so M,Xn t!cn2 D!`t)
5[+ X\N< M02 4^N <~3
S )18ND;7AG 1@@@
A!qa AAGGUC/ GIMITE9
Phn2 A.4;1 Ca+se#ay To#e*1
1< 700 Tun2 Ca+se#ay
D\nh Ca+se#ay HONA/ONA
Te-B 88=@@))1 8@=<800B ;a6B 884@0))
Te-e6B (=88@ WSATC H/ M sa+ Sy 2~! -Q n2Tu! M+a)
DQ
Cpn2 ty 6+ft nhZ' .hg+ -T}n2 tha% HQ NP!
8) STun2 Ha! Ba T*+n2 1 HQ NP! DIETNAM
Te-B 408@@@1 Te-e6B 4088@0 7 DN; DT
\a %h S!`n tjn B DINA;OO9 HANOI M sa+ Sy 2~! -Q n2Tu! BRn)
Ha! ,Nn %n2 S]n2 e S! d! hU' S]n2 $+a Q ,Rn 2so t*Nn %} s^ S!v+ .!`n nhT sa+B
1. HQn2 hoRB Aso t*On2 D!`t Na$
0. Q+y %R%h 'hg$ %hftB
7 Tf$B t! Sa 4(n
7 Th+ 'h|nB t! Sa 181(n
7 Ts' %hftB t! Sa )18n
7 Aso r $a 1@@871@@@
4. S -TUn2B 1)).))) MT t*Nn dTd! (n theo sa -aa %h~n %wa n2Tu! ,Rn
8. A!R %XB 0US9 $Pt MTM t\nh) 2!ao hQn2 thRn2 < Scn thRn2 @7 1@@@
a7 G_t hQn21 %_! tjnh Qo tQ! .hoXn %wa %hw tQ+ n2Tu! $+a
,7 Ch! 'hj .!V$ .!`n ^ t*Nn %|+ %Xn2 S! STU% tjnh Qo tQ! .hoXn %wa n2Tu! ,Rn Mdo n2Tu! ,Rn
%h\+)
%7 Ch! 'hj .!V$ .!`n t*Nn tQ+ STU% tjnh Qo tQ! .hoXn %wa n2Tu! $+a %hw tQ+
d7 Tft %X %R% .hoXn th+c 6+ft .hg+ ^ nTd% 6+ft 6x do n2Tu! ,Rn %h\+
e7 Tft %X %R% .hoXn th+c nhZ'1 th+c .hR% ^ nTd% Scn ... Q ^ %R% nTd% ,Nn n2oQ! D!`t Na$ sW
STU% tjnh Qo tQ! .hoXn %wa n2Tu! $+a
(. Thu! hsn 2!ao hQn2B 0)70( n2Qy sa+ n2Qy $^ GC
<. Bao ,[B Aso 'hX! STU% S_n2 t*on2 ,ao Say $d! t*~n2 -TUn2 t\nh $! ,ao ().21 .hoXn2 ()1<
.2 %X ,[1 .h+ tay ^ $!`n2 ,hn2 %h Say 6e Sp! thj%h hU' %ho !`% ,% R% Q Zn tX! STun2 ,!Vnm
n2Tu! ,Rn sW %+n2 %f' )10n ,ao Say $d! $!n 'hj n2oQ! tn2 s ,ao STU% 6c' t*Nn tQ+.
=. BXo h!V$B N2Tu! $+a sW %h\+
8. /!V$ t*a Q 6pn2 .h_!B
a7 A!fy %hxn2 nhZn %hft -TUn21 t*~n2 -TUn2 Q ,ao ,[ do D!na%ont*o- %f' ^ %Xn2 6c' hQn2 h_a
tjnh %hft %h+n2 thg$ Q %h! 'hj do n2Tu! ,Rn %h\+
%7 Thu! 2!an 6pn2 .h_! .hpn2 tjnh -Q thu! 2!an 6c' hQn2
@. CR% S!v+ .hoXn v 6c' hQn2B
a. N2Tu! $+a sW thpn2 ,Ro ETA %wa %on tQ+ Q %R% nP! d+n2 %h! t!ct %wa n_ 1( n2Qy M sa+ .h!
tQ+ nh neo) Q th+yvn t*T^n2 sW thpn2 ,Ro ETA %wa tQ+1 .h! -TUn2 sW STU% 6c' -Nn tQ+ Q nhqn2
thpn2 t!n %|n th!ct .hR% =08808 2!u t*Td% .h! tQ+ Scn %Xn2 6c' hQn2
,7 Thu! 2!an 6c' hQn2 ,Ot SQ+ tjnh ty 1h t*Ta nc+ NOR STU% t*ao t*Td% ,+! t*Ta Q ty 8h sRn2
%wa n2Qy -Q$ !`% t!c' theo nc+ nhT NOR STU% t*ao Qo ,+! %h!v+ t*on2 2!u -Q$ !`%1 t*on2 t*Tun2
hU' tQ+ SU! SV thX neo [ %Xn2 tO% n2hWn th[ thu! 2!an 6c' hQn2 STU% tjnh sa+ =0 2!u .V ty .h! t*ao
NOR
%7 T% SP 6c' hQn2B 8)) MT $! n2Qy -Q$ !`% -!Nn tr% 08h thu! t!ct %ho 'h{' -Q$ !`% 1 %hw
nhZt1 n2Qy n2h STU% t*y *a thZ$ %hj nc+ %_ s drn21 t*Nn %} s^ %_ jt nhft ty 8 Scn ( h|$ tQ+h|$
hQn2 -Q$ !`% ,[nh thTun2 Q tft %X %R% %|n %g+%|n t*r% Q %+Pn dy tu! sn sQn2 t*on2 t*sn2 thR!
tt1 nc+ jt h}n th[ tjnh theo t -`
d7 N2Tu! ,Rn sW th+ 6c' $Pt S\a S!V$ ,Y neo an toQn ts! $Pt %Xn2 an toQn %ho %on tQ+ %_ sx%
%hxa ty 1).))) MT 7 0).))) MT SV ,% hQn2
e7 /hoXn2 thu! 2!an ty 1=h %h!v+ thx ,Xy Q n2Qy t*Td% $Pt n2Qy n2h %ho Scn 8 sRn2 %wa
n2Qy -Q$ !`% t!c' theo .hpn2 tjnh -Q thu! 2!an 6c' hQn2 thZ$ %hj %_ s drn2
"7 T*Td% .h! t*ao NOR1 %on tQ+ 'hX! %_ 2!fy >+R %Xn21 n2ay sa+ .h! tQ+ %Z' %Xn2 M ,Y neo) 1
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h|$ tQ+h|$ hQn2 ss%h .hp1 .hpn2 %_ tR% nhn 2y hs! Q thj%h hU' SV %h^ -T}n2 tha% Q nhqn2 %h!
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7 A!fy %hxn2 nhZn 6+ft 6x
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08h sa+ .h! hoQn thQnh 2!ao hQn2
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7 NOR %_ %hq .j %wa n2Tu! ,Rn
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Scn %Xn2 6c' hQn2 SV nhZn s hQn2 t*on2 hU' S]n2 nhTn2 n2Tu! ,Rn .hpn2 %_ hQn2 SV ,% -Nn tQ+
6R% nhZn %wa D!et%o$,an.
1). Thanh toRnB
a7 Sa+ .h! .j .ct hU' S]n2 nQy1 n2Tu! $+a hoz% n2Tu! ,Rn STU% %h S\nh %wa n2Tu! $+a
M SH:E GIANMH/)7 MANU;ATURINA CO.GT9 hoz% n2Tu! STU% %h S\nh .hR%) sW te-e6 Sv n2h\
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! d! <).))) MT n2Tu! ,Rn %n2 %hf' nhZn *hn2 n2Tu! $+a hoz% n2Tu! %h S\nh %wa n2Tu!
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T*on2 t*Tun2 hU' ,n n2Qy .V ty n2Qy n2Tu! $+a nhZn STU% 6R% nhZn %wa D!et%o$,an.1
nhTn2 GC .hpn2 STU% $^ th[ n2Tu! ,Rn sW th+ h]! P.B ty D!et%o$,an. Q sa+ S_ hU' S]n2 ta SPn2
STU% h+ ,Y.
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,7 D!`% 6+ft t*[nh nhqn2 %hxn2 ty sa+ Sy %ho n2n hQn2 N2os! thT}n2 D!`t Na$1 STU% thanh
toRn t*on2 n2 47( n2Qy -Q$ !`% %wa n2n hQn2 sa+ .h! nhZn STU% ,x% te-e6 S STU% .!V$ t*a ty
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GC
7 MPt ,P S|y Sw Zn S}n ss%h S 6c' hQn2 -Nn tQ+ ,a ,Xn 2% %_ 2h! CTd% 'hj t*X sa+
7 HoR S}n thT}n2 $s! -Q$ thQnh ,a ,Xn
7 A!fy %hxn2 nhZn %hft -TUn21 t*~n2 -TUn2 Q ,ao ,[ do D!na%ont*o- %f' ^ %Xn2 ,% hQn2 sW %_
2!R t*\ 'hR' -j %+! %n2 STU% -Q$ thQnh sR+ ,Xn
7 Nhqn2 %h! t!ct thpn2 ,Ro 2! hQn2 ,hn2 S!`n tjnTe-e6;a6 t*on2 n2 08h sa+ .h! hoQn thQnh
!`% ,% hQn2
11. Bft .hX .hRn2
!v+ .hoXn ,ft .hX .hRn2 %wa Phn2 ThT}n2 $s! >+% tc M ICC fn 'hg$ s 801) theo hU'
S]n2 nQy STU% .ct hU' thQnh 1 ,P 'hZn t*on2 hU' S]n2 nQy
10. T*~n2 tQ!B
Bft %x sa .hR% ,!`t Qhoz% t*anh %hf' nQo 'hRt s!nh ty Q t*on2 >+an h` d! hU' S]n2 nQy $Q
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Phn2 ThT}n2 Ms! >+% tc ^ Pa*!s hU% nhqn2 n}! .hR% do ha! ,Nn thoX th+Zn
14. CR% S!v+ .hoXn .hR%B
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,hn2 n ,Xn
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16-"4
CHAPTER 1
Negoti"ting De#i$e%&
+ro"#em in negotiating =e#i&er$
In $any e6'o*t ne2ot!at!ons1 the t#o s!des "a!- to d!s%+ss !$'o*tant as'e%ts o" de-!e*y. Th!s
%*eates a *!s.y1 and +n%e*ta!n s!t+at!on !" the*e !s a de-ay o* !" de-!e*y does not 2o a%%o*d!n2
to '-an. Ho# %an the e6'o*te* ,e s+*e that a-- the ne%essa*y de-!e*y '*o!s!ons a*e !n the
%ont*a%t&
-.e +rinip#e.
The e6'o*te* and the ,+ye* sho+-d ne2ot!ate de-!e*y syste$at!%a--y1 $a.!n2 a-- ne%essa*y
de%!s!ons and d!s%+ss!n2 ho# they #!-- so-e any '*o,-e$s that $!2ht a*!se. A ste'7,y7ste'
oe*!e# o" the de-!e*y '*o%ed+*e !s an !$'o*tant a!d to '-ann!n2.
In more =ept.
When an e6'o*te* and a ,+ye* ne2ot!ate de-!e*y1 %e*ta!n >+est!ons a-#ays a*!se. What !s the
date o" de-!e*y& Whe*e $+st the 2oods ,e sent& Who 'ays "o* t*ans'o*tat!on& B+t othe*
>+est!ons a*e o"ten oe*-oo.ed. One e6a$'-eB the t*ans"e* o" *!s.. When e6a%t-y does the *!s.
o" o#n!n2 the 2oods7 the *!s. o" -os!n2 the$1 the *!s. o" !nC+*y to an !nno%ent 'asse*7,y 7
#hen do s+%h *!s.s 'ass "*o$ the e6'o*te* to the ,+ye*&
To $a.e th!n2s %-ea*1 #e3-- +se a %ase ,ased on the "o--o#!n2 s%ena*!oB
Ayshe AE!E o#ns 9o+,-e7A G!$!ted.1 a %o$'any !n De*,ena that $an+"a%t+*es ha!* t*eat$ent
'*od+%ts. A ,+ye* "*o$ Es'e*anEa1 Tony M!no1 !s!ts AE!E to d!s%+ss the e6'o*t o" a t*!a-
%ons!2n$entB 1)) %a*tons o" standa*d sha$'oo and 1)) %a*tons o" sha$'oo "o* d*y ha!*. I"
the sha$'oo se--s #e--1 $o*e o*de*s #!-- "o--o#.
The !dea o" #o*.!n2 !n 5ste's? -oo.s s!$'-e1 ,+t !t se-do$ #o*.s o+t !n '*a%t!%eB de%!s!on7
$a.!n2 '*o%esses a*e nea*-y a-#ays 5*e%+*s!e?.MRe%+*s!e $eans that a '*o%ess %onstant-y
-oo's ,a%.1 %o$'a*!n2 and %onne%t!n21 and then *e%o$'a*!n2 and *e%onne%t!n2 a*!o+s
sta2es.) A -o2!%a-1 ste'7,y7ste' se>+en%e !s s+22ested he*e to s!$'-!"y d!s%+ss!on o" the !dea.
A"te* an oe*!e# o" the "!e ne2ot!at!n2 ste's !n th!s se%t!on1 the "o--o#!n2 se%t!ons -oo. at
the !ss+es !n deta!-.
1tep '
1tep 4 TERMS O;
1tep * RIS/1 TITGE TRA9E
1tep % TRANSPORT AN9 In%ote*$ to
1tep 1 GOCATION ModeMs) o" INSURANCE ,e +sed.
TIMINA P-a%e o" t*ans'o*t T*ans"e*
9ate o" de-!e*y to ,e +sed o"
de-!e*y1 La-te*nat!es o#ne*sh!'.
L*es+-ts and
o" de-ay !ns+*an%e
1tep 1: -iming: :.en M9st De#i&er$ -ake +#aeZ
The "!*st >+est!on $ost ne2ot!ato*s ta%.-e !s "*en2 In o+* s%ena*!o1 AE!E and M!no a*e %e*ta!n
to d!s%+ss a de-!e*y s%hed+-eB
o The date o" d!s'at%h "*o$ the "a%to*ym
o The date o" -oad!n2 onto a sh!'m
o The date #hen the 2oods sho+-d a**!e !n Es'e*anEa.
The date o" de-!e*y -!es at the hea*t o" a sa-es %ont*a%t ,e%a+se !t !s the .ey to $any %ont*a%t eents
las #e sha-- see !n the ne6t se%t!on. A-tho+2h $ost ne2ot!ato*s "!6 th!s date1 they o"ten "o*2et the
K#hat7!"&K >+est!onsB 3*at i# AE!E !s -ate !n send!n2 the 2oods& 3*at the*e !s de-ay !n -oad!n2 the
2oods onto the sh!'& 3*at !" the sh!' a**!es -ate& 3*at i# the 2oods a**!e -ate !n Es'e*anEa& These
a*e >+est!ons o" de-ay. So$e .!nds o" de-ay $ay ,e e)c!sable- "o* e6a$'-e1 de-ay o" a day o* t#o1
es'e%!a--y oe* a #ee.end1 !s o"ten no '*o,-e$ "o* the ,+ye*. A $o*e se*!o+s %aseB !" #a* ,*ea.s o+t1
o* !" AE!EH "a%to*y !s s#e't a#ay ,y a h+**!%ane1 then ,oth s!des $+st a%%e't that de-!e*y #!-- ,e -ate
Mo* $ay not ta.e '-a%e at a--). A2a!n1 AE!EH "a!-+*e to de-!e* !s e6%+sa,-e. B+t !" de-!e*y !s -ate and
the*e !s no *easona,-e e6%+se1 #hat then& 9e-ay #!-- %ost M!no $oneyB %an he *e%-a!$ 'a*t o" h!s
-osses "*o$ AE!E& And1 !" so1 ho# $+%h& A-- these >+est!ons a*!se "*o$ the "+nda$enta- >+est!on
"*en2 And1 as #e sa# !n the Int*od+%t!on1 !" the %ont*a%t '*o!des no ans#e*s1 then the ans#e*s a*e
"o+nd !n the a''-!%a,-e -a#lo"ten to the s+*'*!se o" ,oth 'a*t!es. A%%o*d!n2-y1 2ood ne2ot!ato*s
*e2+-ate s+%h $atte*s !n the!* a2*ee$ent.
8
Ste' 0B Go%at!onB What !s the P-a%e o" 9e-!e*y&
The >+est!on o" "*ere de-!e*y ta.es '-a%e !s not as s!$'-e as !t see$s on the s+*"a%e. An easy %ase
"!*stB !" I o*de* a '!EEa "*o$ the -o%a- '!EEa*to72o1 !t !s Kde-!e*edK #hen !t *ea%hes $y ho+se. I" I ,+y
a '!ano and the $+s!% sto*e as.s a s'e%!a-!st %o$'any to t*ans'o*t !t1 the '!ano !s1 a2a!n1 de-!e*ed
#hen !t *ea%hes $y add*ess. Th!n2s a*e d!""e*ent1 ho#ee*1 !" o*2an!Ee t*ans'o*t o" the '!ano. In that
%ase1 de-!e*y ta.es '-a%e #hen $y "*!ends a**!e #!th the!* an at the $+s!% sho' to '!%. +' the
'!ano. The sho' #!-- not a%%e't -!a,!-!ty "o* #hat $y "*!ends $!2ht do to the '!ano on%e !t has -e"t the
sto*e. Th!s !s a "a!* '*!n%!'-eB t*e e)porter s*o!l+ *ave no liability #or t*e $oo+s "*en t*ey are
beyon+ *is control.
Most !nte*nat!ona- t*ade #o*.s on that '*!n%!'-eB %ont*o- and *es'ons!,!-!ty 2o to2ethe*. One %o$$on
'atte*n !s "o* the e6'o*te* to t*ans'o*t the 2oods to the do%.s !n h!s o#n %o+nt*y and "o* the !$'o*te*
to o*2an!Ee t*ans'o*t on "*o$ the*e. MTh!s !s the 'atte*n o" ;OB de-!e*y1 as #e sha-- see -ate*.H) S+%h
an a**an2e$ent !s +s+a-h %hea'e* than !" the e6'o*te* t*!es to o*2an!Ee doo*7to7doo* t*ans'o*tat!on.
B+t1 +nde* so7%a--ed ;OB de-!e*)H1 #he*e does Kde-!e*yK ta.e '-a%e& At Po!nt A1 B. C o* 9&
The ans#e* !n o+* %ase M;OB de-!e*y) !s B. B+t the 'a*t!es a*e "*ee to a**an2e anyth!n2 that s+!ts
the$. The '-a%e o" de-!e*y !s do+,-y !$'o*tant to the e6'o*te* ,e%a+se the date o# payment no*$a--y
de'ends on the '-a%e and t!$e de-!e*y. At th!s 'o!nt1 too1 *!s. and o#ne*sh!' o"ten 'ass.
1)
77777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777
8
See Cha'te* 1. Se%t!on 0 ,e-o# "o* deta!-ed !n"o*$at!on.
@
See Cha'te* 1. Se%t!on < ,e-o# "o* de-!e*y +nde* In%ote*$s
1)
;o* deta!-ed !n"o*$at!on on *!s. and o#ne*sh!'1 se% Se%t!on 4 ,e-o#.
1tep *: -ransport
The "!*st >+est!on a,o+t t*ans'o*t !s *o"l What $ode o" t*ans'o*t !s $ost a''*o'*!ate& ;*o$ an
!s-and -!.e De*,ena1 t#o $odes o" t*ans'o*t a*e aa!-a,-eB sh!'s and a!*%*a"t. It !s +n-!.e-y that M!no
#!-- as. AE!E to sh!' the sha$'oo ,y a!*B a!* t*ans'o*t !s too e6'ens!e. Sea t*ans'o*t !s1 then1 the
$o*e a''*o'*!ate. When 2oods t*ae- ,y sea1 they a*e o"ten sh!''ed ,y %onta!ne*. The adanta2es o"
%onta!ne*s a*e #e-- .no#n M-o#e* *!s. o" '!-"e*a2e1 easy t*a%ea,!-!ty1 s$oothe* hand-!n2)1 ,+t the
e%ono$!%s o" %onta!ne*!Eat!on de'end -a*2e-y on the s!Ee o" the %ons!2n$ent. In '*a%t!%e1 ea%h
%ons!2n$ent sho+-d ,e *o+2h-y one %onta!ne* -oadB a -!tt-e $o*e1 and t#o %onta!ne*s #!-- ,e needed
at do+,-e the %ostm so$e#hat -ess and the %a**!e* !s 'a!d to t*ans'o*t th!n a!*. 0)) %a*tons o" sha$'oo
a*e not a -a*2e eno+2h o*de* to C+st!"y a %onta!ne*m !" AE!E !s a 2ood ne2ot!ato*1 she #!-- s+22est that
M!no !n%*ease the s!Ee o" the o*de* to %*eate a %onta!ne*7-oad1 o* that he o*de* d!""e*ent '*od+%ts to
"!-- +' the %onta!ne*.
In-and t*ans'o*t !s $ade ,y *oad1 ,y *a!-1 ,y ,a*2e1 ,y $a!-1 o* ,y a $!6t+*eB the %ho!%es a*e "a$!-!a*.
;o* the 2oods to a**!e sa"e-y1 %o**e%t 'a%.a2!n2 and sh!''!n2 $a*.s a*e essent!a-. S+%h $atte*s a*e
o"ten $ade the s+,Ce%t o" a se'a*ate %-a+se !n the e6'o*t %ont*a%t ,e%a+se %-a!$s a*!s!n2 "*o$ de-ay
o* da$a2e %an ,e sett-ed on-y !" !t !s %-ea* #ho !s *es'ons!,-e "o* 'a%.!n2 and $a*.!n2.
T*ans'o*tat!on 'oses a th!*d1 a-to2ethe* d!""e*ent .!nd o" '*o,-e$B do%+$entat!on. Whatee* $eans
o" t*ans'o*t !s %hosen1 %o**e%t do%+$entat!on !s essent!a-. I" 'ay$ent !s $ade ,y -ette* o" %*ed!tlas
!s o"ten the %asel then the ,an. $+st *e"+se to 'ay !" the sh!''!n2 do%+$ents a*e !n any #ay
!n%o**e%t.
11
1tep 4: -ransfer of Risk, -ransfer of 3)ners.ip, Ins9rane
At the 'o!nt o" de-!e*y1 ris4 2ene*a--y 'asses "*o$ the e6'o*te* to the ,+ye*. What !s the K*!s.K that
'asses& ;!*st1 the *!s. o" -oss o* da$a2e. I" the 2oods a*e s$ashed ,y a "o*.7-!"t1 sto-en ,y a steedo*e
o* da$a2ed ,y a do#n'o+*lone s!de $+st ,ea* the -oss. S!$!-a*-y !" the 2oods %a+se ha*$ to a th!*d
'a*tyl"o* e6a$'-e1 a %ons!2n$ent o" %o**os!es -e"t !n the s+n e6'-odes and see*e-y ,+*ns a
'asse*7,yl#ho 'ays& Ne2ot!ato*s o"ten de%!de1 "o* the sa.e o" s!$'-!%!ty1 that these *!s.s a*e
t*ans"e**ed at the 'o!nt o" de-!e*y1 and th!s1 as #e sha-- see1 !s the standa*d a**an2e$ent +nde* the
so7%a--ed In%ote*$s.
O,!o+s-y the !ss+es o" *!s. and !ns+*an%e 2o hand !n hand. A '*+dent ,+s!ness$an #ho "a%es a *!s.1
a**an2es !ns+*an%e.
T*ans"e* o" o"ners*ip Mo* title as !t !s o"ten %a--ed) %an ta.e '-a%e at any 'o!nt ,et#een the s!2nat+*e
o" the %ont*a%t and "!na- 'ay$ent "o* the 2oods. In !nte*nat!ona- t*ade1 these t#o 'o!nts a*e o"ten
#!de-y se'a*atem the 'a*t!es $+st de%!de #hat they #ant.
10
Ste' (B Te*$s o" T*ade
A-- the de%!s!ons that AE!E and M!no $a.e a,o+t the de-!e*y o" the!* sha$'oo hae ,een $ade
$!--!ons o" t!$es ,e"o*e. ;o* th!s *eason1 the ,+s!ness %o$$+n!ty has dee-o'ed a .!nd a sho*thand
"o* standa*d de-!e*y s!t+at!ons. So$e o" these sho*thand e6'*ess!ons1 ;OB M"*ee on ,oa*d)1 "o*
e6a$'-e1 o* CI; M%ost1 !ns+*an%e and "*e!2ht) a*e "a$!-!a* to $ost ,+s!ness'eo'-e. Othe*s1 s+%h as
99U o* ;CA a*e -ess #e-- .no#n. The adanta2es o" +s!n2 s+%h te*$s a*e o,!o+sB !" AE!E o""e*s the
sha$'oo "o* k0) a %anon 5OB 6Port Verbena7, then M!no .no#s that she #!-- t*ans'o*t the 2oods to
the sh!'Hs *a!- at he* o#n *!s. and %ost. When the 2oods %*oss the sh!'Hs *a!-1 *!s. as #e-- as the %ost o"
"*e!2ht and !ns+*an%e 'ass to h!$. He a-so .no#s that he !s *es'ons!,-e "o* no$!nat!n2 the sh!' that
#!-- ,e +sed. And so on. One te*$ %oe*s a 2*eat dea- o" de%!s!on7$a.!n2.
W!th 'atte*ns o" t*ade1 $eans o" t*ans'o*tat!on1 and %o$$+n!%at!ons %han2!n2 so *a'!d-y1 +sa2e o"
te*$s o" t*ade nat+*a--y dee-o's d!""e*ent-y !n d!""e*ent 'a*ts o" the #o*-dm !nte*nat!ona- t*ade1
ho#ee*1 needs a2*eed1 standa*d!Eed te*$!no-o2y. These standa*ds a*e '*o!ded ,y the Inte*nat!ona-
Cha$,e* o" Co$$e*%e !n Pa*!s !n !ts set o" 14 Incoterms MInte*nat!ona- Co$$e*%!a- Te*$s) !ss+ed
$ost *e%ent-y !n 1@@).
14
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11
;o* $o*e !n"o*$at!on on these '*o,-e$s1 see Se%t!on 8 o" th!s %ha'te* and Cha'te* 0 on 'ay$ent
10
;o* deta!-ed !n"o*$at!on1 se% Se%t!on ( ,e-o#.
14
;o* deta!-ed !n"o*$at!on1 see Se%t!on < ,e-o#
C21E 1-0D7
2gree= on +aper
St+dy the s%ena*!o1 and then ans#e* the >+est!ons.
De*,ena Pa'e* $a.es d!s'osa,-e 'a'e* '-ates1 %+'s and na'.!ns "o* hot7do2 and ha$,+*2e* stands.
John Me**!t1 the "a%to*y $ana2e*1 !s ne2ot!at!n2 "o* *a# 'a'e* to ,e de-!e*ed to h!s "a%to*y "o*
$an+"a%t+*e !nto 'a'e* '*od+%ts. The s+''-!e* !s Wende-- Pa'e* Ind+st*!es o" Es'e*anEa. Wende--
and De*,ena Pa'e* hae a2*eed !n '*!n%!'-e a t*!a- de-!e*y o" 8) tons o" *a# 'a'e*.
Wh!%h o" the "o--o#!n2 de%!s!ons sho+-d the t#o 'a*t!es $a.e !n ne2ot!at!n2 the de-!e*y %-a+se& MI"
the !ss+e *a!sed !s not an as'e%t o" de-!e*y as o+t-!ned a,oe1 the ans#e* !s No.)
1. The >+a-!ty o" the 'a'e*. No.
0. The '-a%e o" de-!e*y. :es
4. The t*ans"e* o" *!s.. :es
8. What to do !" the sh!' na$ed ,y ,+ye* does not a**!e. :es
(. Whethe* o* not to sh!' 2oods !n a %onta!ne*. :es
<. What de-ays !n de-!e*y #!-- ,e e6%+sa,-e. :es
=. When 'ay$ent !s d+e. No
8. Who $+st !ns+*e the 2oods +' to #hat 'o!nt. :es
@. Ho# d!s'+tes #!-- ,e sett-ed. No
1). An In%ote*$. :es
11. What $eans o" t*ans'o*t #!-- ,e +sed. :es
10. The t*ans"e* o" t!t-e. :es
0(74<
VIW % . -IMIN<
-5E +R34LEM
Na$!n2 a de-!e*y date !s the "!*st ste' !n ne2ot!at!n2 the t!$!n2 o" an e6'o*t dea-. Co$'-e6
!ss+es %on%e*n!n2 %o$!n2 !nto "o*%e1 de-ay and %o$'ensat!on "o* de-ay $+st a-so ,e
ne2ot!ated. What a*e the $a!n %ons!de*at!ons !n d*a"t!n2 '*o!s!ons a,o+t t!$!n2 and de-ay&
-5E +RINCI+LE
Be%a+se e6'o*ts a*e o"ten s+,Ce%t to o""!%!a- a''*oa-s1 the de-!e*y date !n $any %ont*a%ts
de'ends on the *e%e!'t o" the -ast a''*oa-. I" de-!e*y !s -ate1 the de-ay !s %-ass!"!ed !nto one
o" t#o %ate2o*!es1 e6%+sa,-e and non7e6%+sa,-e. E6%+sa,-e de-ay o"ten !no-es a 2*a%e
'e*!od and !s nea*-y a-#ays s+,Ce%t to a "o*%e $aCe+*e '*o!s!on
18
. Any -osses to the ,+ye*
%a+sed ,y non7e6%+sa,-e de-ay $+st ,e %o$'ensated. The a$o+nt o" %o$'ensat!on !s +s+a--y
set !n adan%e !n a so7%a--ed 5-!>+!dated da$a2es? '*o!s!on.
IN M3RE DE+-5
Aett!n2 the de-!e*y date *!2ht !s a $atte* o" $ana2e*!a- .no#7ho#B the e6'o*te* $+st .no#
ho# -on2 !t ta.es to o,ta!n s+''-!es1 $an+"a%t+*e the 2oods1 'a%.a2e the$1 a**an2e '*e7
sh!'$ent !ns'e%t!on and t*ans'o*t the$ to the a2*eed 'o!nt o" de-!e*y. ;!*st t!$e e6'o*te*s
o"ten set de-!e*y dates that a*e ho'e-ess-y o't!$!st!% and 'ay a heay 'ena-ty "o* the!*
$!sta.e. The ,+ye*1 "o* h!s 'a*t1 $+st .no# e6a%t-y #henthe 2oods a*e neededB too ea*-y a
date t!es +' $oney !n +n+sed 2oods1 #h!-e de-!e*y too -ate $ay $ean ,!2 -osses1 es'e%!a--y
!" the 2oods a*e to ,e *eso-d.
As "a* as the %ont*a%t !s %on%e*ned1 the de-!e*y date t*!22e*s $any %ont*a%t eentsB at th!s
t!$e1 the e6'o*te* "+-"!--s h!s '*!$a*y d+t!es +nde* the %ont*a%tm 'ay$ent no*$a--y ,e%o$es
d+eB *!s.1 and o"ten t!t-e1 'ass to the ,+ye*B de-aylas #e-- as any %o$'ensat!on to ,e 'a!d ,y
the e6'o*te*l!s *e%.oned "*o$ the '-anned date o" de-!e*y. What sho+-d the e6'o*te* .no#
a,o+t th!s .ey date&
Naming t.e Date
The s!$'-est #ay to "!6 de-!e*y !s to +se a st*a!2ht"o*#a*d %a-enda* dateB 14th A+2+st 1@@(1
"o* e6a$'-e. E6'o*t %ont*a%ts a*e not a-#ays so s!$'-e1 ho#ee*. ;o* e6a$'-e1 -etHs say AE!E
and M!no $eet !n De*,ena !n 9e%e$,e* and a2*ee that AE!E #!-- se-- sha$'oo to M!no.
A-*eady !t !s %-ea* to the$ ,oth that a %e*ta!n a$o+nt o" 2oe*n$ent *ed7ta'e !s +nao!da,-eB
an e6'o*t -!%ense1 a "o*e!2n e6%han2e 'e*$!t1 and a %e*t!"!%ate o" o*!2!n a*e ne%essa*y.
Be%a+se sha$'oo !s a hea-th7%a*e '*od+%t1 s'e%!a- %e*t!"!%at!on !s ne%essa*y !n the ,+ye*Hs
%o+nt*y. Ho# -on2 #!-- !t ta.e to o,ta!n the ne%essa*y do%+$entat!on& Be%a+se no,ody !s
s+*e1 the 'a*t!es o"ten '-an "o* the %ont*a%t to %o$e !nto e6!sten%e !n t#o ste'sB ste' one !s on
s!2nat+*e Mthe si$nat!re +ate7- ste' t#o !s #hen a-- the '*e%ond!t!ons "o* the sa-e hae ,een
$et Mthe +ate o# comin$ into #orce7.
The date o" %o$!n2 !nto "o*%e !s not +s+a--y a %a-enda* date1 ,+t the date on #h!%h the -ast
'*e%ond!t!on !s $et. Co$$on '*e%ond!t!ons a*eB
o Re%e!'t o" !$'o*t ando* e6'o*t a''*oa-m
o Re%e!'t o" "o*e!2n e6%han2e a''*oa- "*o$ a %ent*a- ,an.m
o Iss+an%e o" a -ette* o" %*ed!t o* ,an. 2+a*anteem
o Ma.!n2 o" a do#n7'ay$ent ,y the ,+ye*m
o Iss+an%e o" an !ns+*an%e 'o-!%yB
o Iss+an%e o" a %e*t!"!%ate o" o*!2!nm
o 9e-!e*y ,y the ,+ye* o" '-ans1 d*a#!n2s o* othe* do%+$entat!on.
Ne2ot!ato*s o"ten a2*ee a %+t7o"" dateB !" the %ont*a%t has not %o$e !nto "o*%e #!th!n a %e*ta!n
t!$e1 "o* e6a$'-e th*ee $onths "*o$ s!2nat+*e1 then !t ,e%o$es n+-- and o!d.
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7
18
The te*$s K2*a%e 'e*!odK and K"o*%e $aCe+*eK a*e e6'-a!ned !n the "o--o#!n2 'a2es
A %+t7o"" date !s %o$$on !n "!6ed7'*!%e %ont*a%tsB a -on2 de-ay %an $a.e the '*!%e +n*ea-!st!%. A
ty'!%a- #o*d!n2B
Coming Into $orce
T*is a$reement s*all come into #orce a#ter e)ec!tion by bot* parties on t*e +ate o# t*e last
necessary approval by t*e competent a!t*orities in t*e co!ntry o# t*e ,eller an+ t*e B!yer.
I# t*e contract *as not come into #orce "it*in ninety +ays o# e)ec!tion, it s*all become n!ll an+
voi+.
Ho# does the date o" %o$!n2 !nto "o*%e a""e%t the de-!e*y date& The de-!e*y date !s no*$a--y "!6ed
"o* a %e*ta!n n+$,e* o" days a"te* the %ont*a%t has %o$e !nto "o*%e. GetHs *et+*n to o+* e6a$'-eB the
%ent*a- ,an. !n M!noHs %o+nt*y1 Es'e*anEa1 o"ten ta.es $onths to a--o%ate "o*e!2n e6%han2e "o*
!$'o*ts. GetHs say !t ta.es AE!E "o+* #ee.s to s%hed+-e '*od+%t!on1 $an+"a%t+*e and sh!' an o*de*.
MGetHs a-so ass+$e that AE!E %annot s+''-y M!noHs sha$'oo "*o$ sto%. ,e%a+se he #ants a s'e%!a-
%o-o*.) Nat+*a--y AE!E !s *e-+%tant to ,e2!n $an+"a%t+*!n2 M!noHs sha$'oo +nt!- h!s o*de* !s de"!n!te.
A%%o*d!n2-y she "!6es the date o" de-!e*y "o+* #ee.s Mhe* $an+"a%t+*!n2 'e*!od) a"te* the date o"
%o$!n2 !nto "o*%e. That #ay. she .no#s e6a%t-y #he*e she stands. So AE!EH %ont*a%t *eadsB
T*e +ate o# +elivery s*all be t"enty ei$*t +ays a#ter t*e +ate o# comin$ #orce o# t*e contract.
-iming an= -ime is of t.e Essene C#a9ses
Ho# !$'o*tant !s st*!%t adhe*en%e to the a2*eed de-!e*) date.H So$et!$es1 '+n%t+a-!ty !s essent!a-. I"
yo+ o*de* a ,!*thday %a.e to ,e de-!e*ed on yo+* ,!*thdam. l08th J+neland the %a.e a**!es on the
0@th. !t !s too -ate. :o+ no -on2e* #ant the %a.e1 and yo+ %an -e2!t!$ate-y *e"+se to a%%e't !t. In a
%ont*a%t *e>+!*!n2 a,so-+te '+n%t+a-!ty1 -a#ye*s sa that Kt!$e !s o# t*e essence o" the %ont*a%tKl!"
the t!$e !s not .e't1 the ,+ye* has the *!2ht to send ,a%. the 2oods and *e"+se 'ay$ent.
Is t!$e no*$a--y Ko" the essen%eK !n %o$$e*%!a- -!"e& Most -e2a- syste$s say KNo.K Gate de-!e*y !s a
n+!san%e1 ,+t !t !s *a*e-y "ata- to the ,+ye*Hs '+*'oses. Th!s !s so1 een !" the %ont*a%t %onta!ns a %-a+se
s+%h asB
Time is an+ s*all be o# t*e essence o# t*is contract.
9es'!te th!s %-ea* #o*d!n21 a C+d2e $ay de%!de that t!$e !s not o" the essen%e and that the ,+ye*
%annot te*$!nate the %ont*a%t. B+t -ate de-!e*y st!-- has e6'ens!e *es+-ts "o* the e6'o*te*1 as #e sha--
see !n a $o$ent.
One othe* 'o!nt !s #o*th $a.!n2 on the '*e%!se $ean!n2 o" de-!e*y dates. GetHs say a %ont*a%t %o$es
!nto "o*%e on 0(th Noe$,e*B de-!e*y !s "!6ed th!*ty days a"te* %o$!n2 !nto "o*%elCh*!st$as 9ay !n
$any '-a%esF M+st the e6'o*te* de-!e* on a '+,-!% ho-!day& No*$a--y not. 9e-!e*y ta.es '-a%e1
+nde* $ost -e2a- syste$s1 on the ne6t #o*.!n2 day a"te* the a2*eed t!$e. The 'a*t!es %an %han2e th!s
!" they #!sh1 ,+t "e# %ont*a%ts do so.
In so$e %ont*a%ts the e6'o*te* has the "+*the* d+ty to not!"y the ,+ye* that de-!e*y has ta.en '-a%e.
The e6a%t "o*$ o" th!s not!"!%at!on a*!es "*o$ %ont*a%t to %ont*a%t1 de'end!n2 !n 'a*t on the '-a%e o"
de-!e*y1 on the $ethod o" 'ay$ent1 and on the needs o" the ,+ye*.
Ex9se= De#a$ an= t.e <rae +erio=
AE!E and A*aha$1 a %+sto$e* !n Nona$!a1 hae done ,+s!ness to2ethe* "o* so$e yea*s. In the!*
*e2+-a* %ont*a%ts !s th!s %-a+se
1(
on -ate de-!e*yB
5or eac* "ee4 o# late +elivery t*e ,eller s*all pay t*e B!yer 8.1& c# t*e contract price.
At '*esent1 AE!E and A*aha$ a*e ne2ot!at!n2 de-!e*y o" 8)) %a*tons o" ha!* %ond!t!one*. A*aha$
#ants de-!e*y on 0)th May. AE!E do+,ts that she %an a%h!ee th!s date and o""e*s 0)th J+ne. AE!E
#onHt 2!e an ea*-!e* date ,e%a+se she *!s.s 'ay!n2 the a2*eed K'ena-tyK !" she !s -ate. A*aha$ !s
*e-+%tant to a%%e't the -ate* datem he #ants the ea*-!est de-!e*y 'oss!,-e. As s.!--"+- ne2ot!ato*s1 AE!E
and A*aha$ de%!de to "!6 the ea*-!e* date as the de-!e*y date1 ,+t to #a!e the 'ay$ent o" a 'ena-ty
"o* a $onthl %*eat!n2 a one7$onth $race perio+.
1(
T*ere is a #!ll e)planation o# s!c* 9penalty9 cla!ses belo".
The!* %ont*a%t no# *eadsB
I# +elivery is not e##ecte+ "it*in one mont* o# t*e a$ree+ +elivery +ate, t*en t*e ,eller s*all pay t*e
B!yer 8.1& o# t*e contract price.
The e""e%t o" a one7$onth 2*a%e 'e*!od !s not at a-- the sa$e as a de-!e*y date set "o* one $onth
-ate*B the e6'o*te* has an ea*-y1 2ood7"a!th ta*2et to $eet1 and the ,+ye* %an e6e*t %ons!de*a,-e $o*a-
'*ess+*e ,e"o*e the $e%han!s$ o" the K'ena-tyK ta.es oe*. And the*e a*e %-ea* adanta2es to ,oth
s!des !" ea*-y de-!e*y !s 'oss!,-eB the ,+ye* 2ets the 2oodsland the e6'o*te* *e%e!es 'ay$entl+'
to a $onth ea*-!e* than '-anned. These adanta2es a*e a%h!eedl+n+s+a--yl#!tho+t add!t!ona-
*!s.s.
E6%+sed 9e-ay and ;o*%e MaCe+*e
Aood "a!th !s essent!a- !n ,+s!ness -!"el,+t !t does not a-#ays ass+*e s+%%ess. I" d!saste* st*!.es !n
the "o*$ o" a h+**!%ane o* an ea*th>+a.e1 the e6'o*te* $ay ,e +na,-e to de-!e* on t!$e1 o* at a--.
S+%h nat+*a- d!saste*s a*e so$et!$es %a--ed Ka%ts o" AodK and1 ,y -on2 t*ad!t!on1 a%ts o" Aod e6%+se
'e*"o*$an%e o" a %ont*a%t. In *e%ent t!$es1 -a#ye*s hae a*2+ed that othe* +nao!da,-e eents sho+-d
a-so e6%+se 'e*"o*$an%eB #a*1 "o* e6a$'-e1 "!*e1 o* ne# 2oe*n$ent *e2+-at!ons. Most *e%ent-y1 so$e
%ont*a%ts hae added st*!.es1 -o%.o+ts and -a,o* +n*est to the -!st. Ta.en to2ethe*1 a-- s+%h
+nao!da,-e %!*%+$stan%es a*e %a--ed #orce ma:e!re Ma ;*en%h e6'*ess!on $ean!n2 a s!perior
po"er7. The '*!n%!'-e ,eh!nd "o*%e $aCe+*e !s %-ea*B !" the e6'o*te* sho#s a,so-+te 2ood "a!th ,+t
s!$'-y %annot de-!e* the 2oods1 then h!s d+t!es +nde* the %ont*a%t %an ,e s+s'ended o* 'e*ha's
te*$!nated a-to2ethe*. A ty'!%a- %ont*a%t #o*d!n2B
I" e!the* 'a*ty !s '*eented "*o$1 o* de-ayed !n1 'e*"o*$!n2 any d+ty +nde* th!s %ont*a%t ,y an eent
,eyond h!s *easona,-e %ont*o-1 then th!s eent sha-- ,e dee$ed "o*%e $aCe+*e1 and th!s 'a*ty sha--
not ,e %ons!de* !n de"a+-t and no *e$edy1 ,e !t +nde* th!s %ont*a%t o* othe*#!se1 sha-- ,e aa!-a,-e to
the othe* 'a*ty.
;o*%e $aCe+*e eents !n%-+de1 ,+t a*e not -!$!ted toB #a* M#hethe* #a* !s de%-a*ed o* not)1 *!ots1
!ns+**e%t!ons1 a%ts o" sa,ota2e1 o* st*!.es1 o* othe* -a,o* +n*estm ne#-y !nt*od+%ed -a#s o*
Aoe*n$ent *e2+-at!onsm de-ay d+e to Aoe*n$ent a%t!on o* !na%t!onm "!*e1 e6'-os!on1 o* othe*
+nao!da,-e a%%!dentsm "-ood1 sto*$1 ea*th>+a.e1 o* othe* a,no*$a- nat+*a- eent.
The "o*%e $aCe+*e %-a+se1 -!.e othe* %ont*a%t '*o!s!ons1 !s ne2ot!a,-em the 'a*t!es %an de%!de #hat
e6%+ses and #hat does not e6%+se 'e*"o*$an%e. In $onsoon %o+nt*!es1 "o* e6a$'-e1 %ont*a%ts o"ten
!n%-+de the state$entB
;o*%e $aCe+*e eents do not !n%-+de $onsoon *a!ns
Any '*o,-e$s the t#o s!des "o*esee %an ,e $ent!oned !n the %ont*a%t as e6%+s!n21 o* not e6%+s!n21
'e*"o*$an%e.
I# a #orce ma:e!re con+ition contin!es #or mont*s, li#e becomes +i##ic!lt #or bot* si+es, so contracts
o#ten re$!late t*e #orce ma:e!re perio+, in partic!lar t*e ri$*t o# one 6or bot*7 parties to terminate
t*e contract.
I# eit*er party is prevente+ #rom, or +elaye+ in, per#ormin$ any +!ty !n+er t*is ontract, t*en t*is
party s*all imme+iately noti#y t*e ot*er party o# t*e event, o# t*e +!ty a##ecte+,an+ o# t*e e)pecte+
+!ration o# t*e event.
I# any #orce ma:e!re event prevents or +elays per#ormance o# any +!ty !n+er t*is ontract #or more
t*an si)ty +ays, t*en eit*er party may on +!e noti#ication to t*e ot*er party terminate t*is
ontract.
The d!a2*a$ ,e-o# sho#s th*ee 'oss!,-e o+t%o$es o" "o*%e $aCe+*eB
T#o o+t%o$es he*e a*e sat!s"a%to*yB *es+$'t!on o" de-!e*y1 and o*de*-y te*$!nat!on o" the
%ont*a%t. B+t the s!t+at!on !s +n%-ea* and *!s.y "o* ,oth s!des !" they "a!-ed to *e2+-ate the!*
*!2hts !n the eent o" "o*%e $aCe+*e.
0NEBC01ED DEL27 2ND 407ER1 REMEDIE1
We $+st no# $a.e so$e d!""!%+-t1 ,+t !$'o*tant1 -e2a- d!st!n%t!ons and see ho# d!""e*ent
-e2a- syste$s %o'e #!th the '*o,-e$ o" 2!!n2 the ,+ye* so$e *e$edy "o* any +ne6%+sed
de-ay he s+""e*s.
;!*st1 the 2ene*a--y a%%e'ted '*!n%!'-eB !" one 'a*ty to a %ont*a%t %a+ses ha*$ o* -oss to the
othe*1 then the -a# #!-- "!nd a #ay to *ed*ess th!s ha*$ o* -oss. When an e6'o*te* de-!e*s
-ate1 th!s no*$a--y %a+ses so$e -oss o* da$a2e to the ,+ye*m $ay,e the ,+ye* %annot +se a
'!e%e o" e>+!'$ent as soon as e6'e%ted o* $+st .ee' one o" h!s o#n %+sto$e*s #a!t!n2. The
-a# '*o!des t#o *e$ed!es "o* s+%h da$a2e.
- The %o+*t $ay o*de* the e6'o*te* to "+-"!-- h!s o,-!2ay!onsB th!s $eans !ss+!n2 a de%*ee o"
s'e%!"!% 'e*"o*$an%e *e>+!*!n2 the e6'o*te* to $a.e a de-!e*y as a2*eed o*
- The %o+*t $ay *e>+!*e the e6'o*te* to 'ay the ,+ye* %o$'ensato*y da$a2es7 a s+$ o" $oney
that #!-- "+--y and ade>+ate-y %o$'ensate the ,+ye* "o* any $eas+*a,-e -oss.
In add!t!on1 the %o+*t $ay a--o# the ,+ye* to %an%e- the %ont*a%t7 tho+2h th!s does noth!n2 to
en"o*%e h!s *!2hts.
Wh!%h %ho!%e !s the %o+*t -!.e-y to $a.e& In the Int*od+%t!on #e sa# that no %ont*a%t !s %o$'-ete !n
!tse-"lee*y %ont*a%t !s s+,Ce%t to so$e nat!ona- -a#. Nat!ona- -a#s "a-- !nto t#o $a!n "a$!-!es
1<
B
those that de*!e "*o$ the En2-!sh %o$$on -a# and those that de*!e "*o$ the Ro$an %!!- -a#. One
d!""e*en%e ,et#een these "a$!-!es !s the!* %ho!%e o" *e$edyB %o$$on7-a# %o+nt*!es MEn2-and1 the
Un!ted States1 $ost o" the B*!t!sh Co$$on#ea-th and e67Co$$on#ea-th) '*e"e* to a#a*d +ama$es,
#h!-e %!!-7-a# %o+nt*!es M$ost othe* %o+nt*!es) +s+a--y en"o*%e per#ormance.
The %on%e't o" en"o*%ed 'e*"o*$an%e '*esents no '*o,-e$sB the C+d2e s!$'-y o*de*s the 'a*ty !n
de"a+-t to 'e*"o*$ as '*o$!sed. 9a$a2es a*e a $o*e %o$'-e6 !ss+e. 9a$a2es a*e s+$s o" $oney
'a!d to %o$'ensate an !nC+*ed 'a*ty "o* so$e .!nd o" Kda$a2e.K In sett!n2 a "!2+*e "o* %o$'ensato*y
da$a2es "o* -ate de-!e*y1 the %o+*ts +s+a--y as. th*ee >+est!ons1 -oo.!n2 "o* the ans#e* K:esK !n
ea%h %aseB
o 9!d the -oss '*oa,-y "o--o# "*o$ the ,*ea%h&
o Was the -oss *easona,-y %-ose to the ,*ea%h !n the %ha!n o" eents&
o Was the -oss K$!t!2atedKl!n othe* #o*ds1 d!d the ,+ye* ta.e *easona,-e ste's to .ee' the -oss as
s$a-- as 'oss!,-e&
GetHs -oo. at a s%ena*!o to see the '*a%t!%a- e""e%t o" these >+est!onsBB
,cenario- AE!E has a2*eed to de-!e* a %ons!2n$ent o" sha$'oo to M!no on 4)th May. By 4)th J+-y1
she has st!-- not de-!e*ed. Th!s de-ay %a+ses '*o,-e$s "o* M!noB he has a %ont*a%t to de-!e* the
sha$'oo to a %ha!n sto*e !n Es'e*anEa !n ea*-y J+ne. The %ha!n sto*e #*!tes an2*!-y to M!no
de$and!n2 so$e e6'-anat!on. M!no does not *e'-y. In $!d7J+-y the %ha!n sto*e #*!tes to M!no a2a!n
say!n2 that h!s "a!-+*e to de-!e* the sha$'oo !s the -atest !n a -on2 %ha!n o" "a!-+*es1 and that they
#ant no $o*e dea-!n2s #!th h!$. The -oss o" th!s %+sto$e* %osts M!no k4))1))) a yea*. M!no
%ons+-ts a -a#ye* a,o+t %-a!$!n2 da$a2es "*o$ AE!E. The -a#ye* e6'-a!ns that to %-a!$ da$a2es
"*o$ AE!E1 M!no #!-- hae to sho# that the -oss o" the k4))1))) #as d+e to AE!EH "a!-+*e to de-!e*
M#h!%h !t #as !n s$a-- 'a*t)1 that the -oss o" the %+sto$e* #as %-ose-y and !$$ed!ate-y %onne%ted
#!th AE!EH "a!-+*e to de-!e* M#h!%h !s a*2+a,-e)1 and that he d!d ee*yth!n2 !n h!s 'o#e* to $!t!2ate
the -oss M#h!%h he d!d not). It !s not -!.e-y that a %o+*t #o+-d o*de* AE!E to 'ay a -a*2e s+$ !n
%o$'ensato*y da$a2es.
Co+*t '*o%eed!n2s to %-a!$ %o$'ensato*y da$a2es1 es'e%!a--y !nte*nat!ona--y1 a*e e6'ens!e1 the
*es+-ts a*e +n%e*ta!n1 and -a# s+!ts dest*oy the #o*.!n2 *e-at!onsh!' ,et#een the 'a*t!es. A%%o*d!n2-y
$ost !nte*nat!ona- %ont*a%ts s'e%!"y the %onse>+en%es o" ty'!%a- ,*ea%hes s+%h as -ate de-!e*y. The
t#o s!des s!$'-y ne2ot!ate a K-+$'7s+$K that the e6'o*te* #!-- 'ay !" de-!e*y !s -ate. Th!s s+$ !s
so$et!$es %a--ed li;!i+ate+ +ama$es and so$et!$es penalty. What !s the d!""e*en%e ,et#een these
te*$s&
M;o* "+*the* !n"o*$at!on on the "a$!-!es o" -a#1 see Cha'te* 81 Se%t!on 0.)
Li%&idated Damages
No*$a--y the e6'o*te* and the ,+ye* a2*ee a "a!* "!2+*e1 a -+$' s+$ to ,e 'a!d 'e* day M#ee.
o* $onth) o" -ate de-!e*y. Th!s K,est 2+essK !s %a--ed li;!i+ate+ +ama$es.

I" de-!e*y !s s!6ty
days -ate1 the e6'o*te* 'ays s!6ty7days da$a2eslno >+est!ons as.ed. That !s the '*!n%!'-e
,eh!nd s+%h %-a+sesB 'ay$ent o" -!>+!dated da$a2es ao!ds e6'ens!e d!s%+ss!on. T#o #hat7
!" >+est!ons a*!se a,o+t -+$' s+$s1 ho#ee*B "!*st1 #hat !" the ,+ye*Hs -osses a*e $+%h -o#e*
than ant!%!'ated& Noth!n2 %han2esB the e6'o*te* $+st st!-- 'ay. And #hat !" the ,+ye*Hs -osses
a*e $+%h h!2he*& A2a!n1 !n '*!n%!'-e1 noth!n2 %han2esB the e6'o*te* 'ays the a2*eed s+$1 and
the $atte* !s sett-ed.
So$et!$es %o+*ts *a!se o* -o#e* o,!o+s-y +nC+st "!2+*es. ;o* e6a$'-e1 the Ch!nese ;o*e!2n
E%ono$!% Cont*a%t Ga# e$'o#e*s a %o+*t o* a*,!t*a- a2en%y to *ed+%e o* !n%*ease !n an
a''*o'*!ate a$o+nt the a$o+nt o" -!>+!dated da$a2es...!" !t !s s+,stant!a--y $o*e o* -ess than
the *es+-t!n2 -ossm ;*en%h -a# a--o#s a %han2e !" the "!2+*e !s K$an!"est-y e6%ess!e o*
*!d!%+-o+s-y -o#.K
Penalties
9a$a2es a*e 'a!d to %o$'ensate one 'any "o* a -ossla *ea- -oss !n the %ase o" %o$'ensato*y
da$a2es1 a '*e7es2$ated -oss !n the %ase o" -!>+!dated da$a2es. The*e !s. !n '*a%t!%ed1 a th!*d
'oss!,!-!tyB so$et!$es a ,+ye* t*!es to "o*%e the e6'o*te* to de-!e* '+n%t+a--y ,y !$'os!n2 an
a2*eed penalty. A 'ena-ty %-a+se s!$'-y saysB K9e-!e* on t!$e1 o* yo+ #!-- ,e '+n!shed.K
So$et!$es the "!2+*e "!6ed "o* the 'ena-ty !s e*y h!2h. The d!st!n%t!on !s %-ea*B the '+*'ose
o" a 'ena-ty !s not to %o$'ensate ,+t to '+n!sh1 o*1 $o*e %o**e%t-y1 to +se the th*eat o"
'+n!sh$ent to a%h!ee a%%e'ta,-e 'e*"o*$an%e.
Th!s d!st!n%t!on ,et#een a penalty and a '*o!s!on "o* 'ay$ent o" li;!i+ate+ +ama$es !s
!$'o*tant !n %o$$on7-a# th!n.!n2m Most %o$$on7-a# %o+nt*!es %-ass!"y -+$'7s+$ %-a+ses
!n%-+de o" th*ee ty'es a%%o*d!n2 to the motive ,eh!nd the$. Ho# does th!s #o*.& In
*e!e#!n2 a -ate de-!e*y %-a+se1 the C+d2e as.s !" !t !s Ma) a "a!* '*e7est!$ate M-!>+!dated
da$a2es)m M,) an atte$'t to te**o*!Ee Ma 'ena-ty)m o* M%) an atte$'t ,y the e6'o*te* to "!6 a
%o$'ensat!on "!2+*e so -o# that1 !n e""e%t1 !t *e-!ees h!$ o" *es'ons!,!-!ty "o* -ate de-!e*y
Mthe >+as!7!nde$n!ty). I" !t !s a 'ena-ty1
the %o$$on7-a# C+d2e s!$'-y *e"+ses to en"o*%e !t. I" !t !s a -!>+!dated da$a2es '*o!s!on1
the %o$$on7-a# C+d2e M-!.e h!s %!!-7-a# %o+nte*'a*t) en"o*%es the %-a+se. I" !t !s a >+as!7
!nde$n!%y1 the %o$$on7-a# C+d2e +ses so$e d!s%*et!onB a se--e* #ho +ses h!s 'o#e* oe* the
,+ye* M'e*ha's he !s a $ono'o-y s+''-!e*) to "!6 an o+t*a2eo+s-y -o# "!2+*e !s ,eha!n2
!$$o*a--ylo* K+n%ons%!ona,-yK as -a#ye*s e6'*ess !t. The %o+*ts #!-- not en"o*%e a %-a+se
they %ons!de* to ,e K+n%ons%!ona,-e.K The th*ee $ot!es !n s+$$a*y "o*$B
GIQUI9ATE9 9AMAAES PENAGT: QUASI 7IN9EMNIT:
MOTIDEB To
%o$'ensate the
,+ye* "a!*-y "o* any
de-ay !n de-!e*y
MOTIDEB To
te**o*!Ee the e6'o*te*
!nto '+n%t+a-
de-!e*y
MOTIDEB To *e-!ee
the e6'o*te* o"
-!a,!-!ty "o* de!ay !n
de-!e*y
En#orceable
every"*ere b!t s!b:ect
to increase or +ecrease
in some le$al systems
Not en#orceable in
En$lis* la" or ot*er
common la" systems
En#orceable
every"*ere b!t open
to c*allen$e as
9!nconscionable<
To ,e '*a%t!%a-B ho# do yo+ .no#1 as an e6'o*te*1 !" a %-a+se !n yo+* %ont*a%t #!th yo+*
%+sto$e* !s an en"o*%ea,-e -!>+!dated da$a2es '*o!s!on o* an +nen"o*%ea,-e 'ena-ty& GetHs
see ho# an En2-!sh Mo* %o$$on7-a#) C+d2e $!2ht '*o%eed !n a s'e%!"!% %ase. ;!*st the %-a+seB
Li89i=ate= Damages
I" the Se--e* "a!-s to s+''-y any o" the Aoods #!th!n the t!$e 'e*!od s'e%!"!ed !n the Cont*a%t1
the B+ye* sha-- not!"y the Se--e* that a ,*ea%h o" %ont*a%t has o%%+**ed and sha-- ded+%t "*o$
the Cont*a%t P*!%e 'e* #ee. o" de-ay1 as -!>+!dated da$a2es1 a s+$ e>+!a-ent to one ha-"
'e*%ent o" the de-!e*ed '*!%e o" the de-ayed Aoods +nt!- a%t+a- de-!e*y +' to a $a6!$+$
ded+%t!on o" 1)n o" the de-!e*ed '*!%e o" the de-ayed Aoods.
To de%!de !" th!s '*o!s!on !s a 'ena-ty o* a -!>+!dated da$a2es %-a+se1 the %o$$on7-a# C+d2e
"!*st st+d!es the #o*d!n2. The head!n2 !s KG!>+!dated 9a$a2esK and K-!>+!dated da$a2esK !s
$ent!oned !n the te6t1 ,+t th!s !s not de%!s!e. The C+d2e then as.s so$e >+est!onsB Was the
"!2+*el).(n 'e* #ee. +' to a $a6!$+$ o" 1)nla2*eed as a "a!* and *easona,-e est!$ate
o" the -oss the ,+ye* $!2ht s+""e*& Ho# #as the "!2+*e %a-%+-ated& 9!d the t#o s!des d!s%+ss
o* de,ate !t& I" the "!2+*e !s "a!*1 the C+d2e en"o*%es the %-a+sem !" !t !s +n"a!*-y h!2h1 the C+d2e
#!-- de%!de that !ts *ea- '+*'ose !s to Kte**o*!EeK the e6'o*te* and *e"+se to en"o*%e the %-a+se.
CONCEPT RE'IE#
MAIN $ORCE
Read th!s Co$!n2 Into ;o*%e '*o!s!onm then ans#e* the >+est!on.
T*is contract s*all come into #orce a#ter approval by t*e $overnments o# t*e ,eller an+ t*e
B!yer, *o"ever at t*e latest by =1
st
December '88>.
9oes th!s '*o!s!on $eanB
A. That the %ont*a%t #!-- %o$e !nto "o*%e on 41
st
9e%e$,e* 0))= een !" the t#o 2oe*n$ents hae
not a''*oed !t& O*
B. That the %ont*a%t #!-- ,e%o$e n+-- n!- no+2ht and o!d !" !t has not %o$e !nto "o*%e ,y 41
st

9e%e$,e* 0))=&
A B
The ans#e* !s B. A %ont*a%t %annot %o$e !nto "o*%e #!tho+t 2oe*n$ent a''*oa- !" s+%h a''*oa-
!s *e>+!*ed ,y '+,-!% -a#.
C21E 1-0D7
2 (ine Contrat
St+dy the %on*a%t %-a+se ,e-o#1 and then ans#e* the >+est!ons.
;!ne Paya,-e
I# t*e ,eller #ails to +eliver t*e ?oo+s at t*e #i)e+ +ate, a #ine s*all be impose+ !pon *im #or
t*e perio+ o# +elay, !ntil +elivery is complete+. T*e #ine s*all be as #ollo"s-
'& #or t*e #irst "ee4, or any part o# it.
@& #or t*e secon+ "ee4, or any part o# it.
A& #or t*e t*ir+ "ee4, or any part o# it.
B& per "ee4 #or t*e #o!rt* "ee4, or part o# it, an+ #or all s!ccee+in$ "ee4s.
The "!ne sha-- ,e %a-%+-atedHon the tota- %ont*a%t a-+e.
1. The %-a+se +ses the #o*d K"!ne.K 9oes that te-- yo+ "o* %e*ta!n #hat .!nd o" %-a+se yo+ a*e -oo.!n2
at& MPena-ty %-a+se o* -!>+!dated da$a2es %-a+se&) :ES NO
0. A"te* ho# -on2 a de-ay does the e6'o*te* -ose 1))n o" the %ont*a%t '*!%e&
.......WEE/S
4. 9o yo+ th!n. th!s %-a+se !s a 'ena-ty %-a+se o* a -!>+!dated da$a2es %-a+se&
PENAGT: GIQUI9ATE9 9AMAAES
8. I" an En2-!sh C+d2e a''-y!n2 En2-!sh -a# -oo.s at th!s %-a+se1 #!-- !t ,e en"o*%ea,-e&
:ES NO
1. The #o*d 5"!ne? s+22ests1 ,+t does not '*oe1 that the %-a+se see.s to !$'ose a 'ena-ty.
'. 18 #ee.s.
(. Pena-ty %-a+se. The s+$ ,ea*s no *e-at!on to any ant!%!'ated -oss.
). No. En2-!sh C+d2es do not7 !n '*!n%!'-e7 en"o*%e 'ena-ty %-a+ses. MB+t so$e %a+t!on !s neededB
the C+d2e #!-- de%!de a%%o*d!n2 to a-- the $e*!ts o" the %a+se.)
C21E 1-0D7
(ore Male9re
De*,ena J+te $a.es sa%.s1 sa%.%-oth1 and othe* C+te '*od+%ts. Its standa*d %ont*a%t !n%-+des th!s
de"!n!t!on o" an eentB
I" e!the* 'a*ty !s '*eented "*o$1 o* de-ayed !n1 'e*"o*$!n2 any d+ty +nde* th!s Cont*a%t ,y an
eent ,eyond h!s *easona,-e %ont*o-1 then th!s eent sha-- ,e dee$ed "o*%e $aCe+*e...
The #o*d 5%ont*o-? needs so$e tho+2ht. An eent !s ,eyond the %ont*o- o" the e6'o*te* Ma) !" he
%o+-d not hae "o*eseen !tm M,) !" he %o+-d not hae !n"-+en%ed !t1 and M%) !" he %o+-d not hae
ta.en *easona,-e ste's to ao!d the '*o,-e$s that #e*e -!.e-y to a*!se.
1. A o-%an!% e*+'t!on ,+*!es the "a%to*y !n ash. M:es)
0. The ann+a- "-ood!n2 o" the R!e* De*o *+!ns so$e o" the C+te !ntended "o* +se !n $a.!n2
sa%.s. MNo)
4. A ,an !s !ss+ed on the e6'o*t o" C+te '*od+%ts ,y a ne#-y e-e%ted 2oe*n$ent. M:es)
8. A ,an !s !ss+ed on the e6'o*t o" C+te '*od+%ts ,y a 2oe*n$ent that has ,een '*e'a*!n2
-e2!s-at!on on th!s s+,Ce%t "o* "!e yea*s. MQ+est!ona,-e)
(. The #o*."o*%e at the "a%to*y 2o on st*!.e. MQ+est!ona,-e)
<. The do%. #o*.e*s !n Po*t De*,ena 2o on st*!.e. M:es)
=. A -o%.o+t MBa%.2*o+ndB The #o*.e*s hae ,een st*!.!n2 "o* one day o* a #ee.. The
$ana2e$ent -o%.s the #o*.e*s o+t o" the "a%to*y +nt!- they a2*ee to end the st*!.es. MP*o,a,-y
no)
8. Sho*ta2e o" s+''-!es MBa%.2*o+ndB The e6'o*te* %annot 2et the *a# C+te he needs "*o$ the
s+''-!e* ,e%a+se o" a sh!''!n2 de-ay.) MNo)
@. Sho*ta2e o" s+''-!es MBa%.2*o+ndB The e6'o*te* %annot 2et the *a# C+te he needs "*o$ the
s+''-!e* ,e%a+se the Cent*a- Ban. #!-- not 2!e h!$ "o*e!2n e6%han2e to 'ay the s+''-!e*. M:es)
1). A "!*e ,+*ns do#n the "a%to*y. M:es)
*. +#ae of De#i&er$
THE PROBLEM
In no*$a- s'ee%h1 the #o*d Kde-!e*yK $eans the a**!a- o" 2oods at the!* dest!nat!on1 ,+t th!s !s not
the a%%e'ted $ean!n2 !n %ont*a%t -an2+a2e. Cons!de*a,-e %on"+s!on %an a*!se !" the 'a*t!es "a!- to
%-a*!"y #hat they $ean ,y the '-a%e o" de-!e*y.
THE PRINIPLE
The '-a%e o" de-!e*y !s the 'o!nt at #h!%h the e6'o*te* 'asses *es'ons!,!-!ty "o* the 2oods to the
,+ye*. Th!s !s +s+a--y !n the %o+nt*y o" the e6'o*te*m !" sea t*ans'o*t !s +sed1 de-!e*y no*$a--y ta.es
'-a%e at the do%.sm !n the %ase o" -and o* %onta!ne* t*ans'o*t1 de-!e*y no*$a--y ta.es '-a%e #hen the
2oods a*e handed oe* to the %a**!e*. 9e-!e*y a-so ta.es '-a%e !n the %o+nt*y o" the e6'o*te* !n the
%ase o" CI; and CIP %ont*a%ts1
1@
een tho+2h the e6'o*te* $+st ,ea* the %osts o" "*e!2ht and
!ns+*an%e th*o+2h to the na$ed dest!nat!on.
IN MORE DEPTH
We sa# !n the !nt*od+%t!on to th!s %ha'te* that de-!e*y %an ta.e '-a%e at a n+$,e* o" '-a%es ,et#een
the $an+"a%t+*e*Hs "a%to*y and the ,+ye*Hs #a*eho+se. I" the ,+ye* sends a t*+%. to %o--e%t the 2oods
"*o$ the "a%to*y1 de-!e*y ta.es '-a%e at the "a%to*y. I" the $an+"a%t+*e* '+ts the 2oods on h!s o#n
t*+%. and d*!es the$ to the ,+ye*Hs #a*eho+se1 de-!e*y ta.es '-a%e at the #a*eho+se. Both o" these
a**an2e$ents a*e1 ho#ee*1 *a*e !n !nte*nat!ona- t*ade. No*$a--y de-!e*y ta.es '-a%e at so$e
!nte*$ed!ate '-a%e a-on2 the -!ne o" t*ans'o*tat!on. It !s +se"+-1 !n th!s %onte6t1 to as. #hat the -a#
says !" the 'a*t!es a2*ee noth!n2 ,et#een the$se-es. Unde* $ost nat!ona- -a#s1 a %ont*a%t "o* the
sa-e o" 2oods a,*oadlass+$!n2 t*ans'o*tat!on ,y sh!'l!s no*$a--y %ons!de*ed as an 5OB 65ree on
Boar+7 contract- de-!e*y ta.es '-a%e #hen the 2oods %*oss the *a!- o" the sh!' no$!nated ,y the
,+ye*. Th!s !s 'e*"e%t-y *easona,-eB "*o$ the ,+ye*Hs 'o!nt o" !e# !t !s o"ten %hea'e* to a**an2e sea
t*ans'o*tat!on #!th a %a**!e* and an !ns+*e* !n h!s o#n %o+nt*ym "*o$ the e6'o*te*Hs !e#'o!nt1 he has
no %ont*o- oe* the 2oods on%e they a*e on ,oa*d the sh!' %hosen ,y the ,+ye*1 so he sho+-d hae no
*es'ons!,!-!ty. It !s a-so "a!* that the e6'o*te*1 #ho has $oney t!ed +' !n the 2oods1 sho+-d ,e 'a!d
#hen the 2oods -eae h!s %o+nt*y. B+t the $atte* !s d!s'os!eB the 'a*t!es %an $a.e any a**an2e$ent
they #!sh. I" an ;OB %ont*a%t !s a2*eed1 then the %ont*a%t %onta!ns #o*d!n2 s+%h asB
The te*$s ;OB1 CI; and so onlthe th!*teen In%ote*$sla*e the s+,Ce%t o" Se%t!on < ,e-o#.
9e-!e*y o" the Aoods sha-- ,e $ade ;OB MMo$,asa).
The te*$ ;OB !s a-#ays "o--o#ed1 as !n th!s e6a$'-e1 ,y the na$e o" the 'o*t #he*e de-!e*y #!--
ta.e '-a%e. MThe na$e o" the 'o*t !s so$et!$es 2ene*a-!Eed !nto1 "o* e6a$'-e1 K/enyan 'o*tK o*
KEn2-!sh east7%oat 'o*t.K)
One %o$$on a**an2e$ent %a+ses %ons!de*a,-e %on"+s!on !nte*nat!ona--ylthe so7%a--ed CI;
%ont*a%t. CI; stands "o* Cost1 Ins+*an%e and ;*e!2ht. In a CI; %ont*a%t1 the e6'o*te* $+st 'ay the "+--
%osts '-+s the "*e!2ht %ha*2es '-+s !ns+*an%e +' to the na$ed '-a%e o" dest!nat!on1 +s+a--y a 'o*t. ;o*
e6a$'-eB
9e-!e*y o" the Aoods sha-- ,e $ade CI; M9+*,an).
The e6'o*te* 'ays a-- the %osts +' to the 'o*t o" a**!a-1 9+*,an. B+t #he*e does +elivery ta.e '-a%e&
9e-!e*y ta.es '-a%e #hen the 2oods %*oss the sh!'Hs *a!- !n the 'o*t o" sh!'$ent1 e6a%t-y as !n an
;OB %ont*a%t. The 'o!nt !s "o*%e"+--y $ade !n the ICC hand,oo. dea-!n2 #!th In%ote*$sB
S!n%e the 'o!nt "o* the d!!s!on o" %osts *e"e*s to the %o+nt*y o" dest!nat!on1 the KCK7-e*$s a*e
"*e>+ent-y $!sta.en-y ,e-!eed to ,e a**!a- %ont*a%ts1 #he*e,y the se--e* !s not *e-!eed "*o$ any
*!s.s o* %osts +nt!- the 2oods hae a%t+a--y a**!ed at the a2*eed 'o!nt. Ho#ee*1 !t $+st ,e st*essed
oe* and oe* a2a!n d!a- the HCH7te*$s a*e o" the sa$e nat+*e as the K;K7te*$s !n that the se--e* "+-"!--s
the %ont*a%t !n the %o+nt*y o" sh!'$ent o* d!s'at%h. Th+s1 the %ont*a%ts o" sa-e +nde* the KCK7t%*$s1
-!.e the %ont*a%ts +nde* the K;K7te*$s1 "a-- +nde* the %ate2o*y o" sh!'$ent %ont*a%ts 7
B1
The !ss+e !s %*+%!a-lon de-!e*y1 *!s. Mas #e-- as o#ne*sh!' !n $a!n %ases) 'asses and 'ay$ent
+s+a--y "a--s d+e. The 'o!nt !s so o"ten $!s+nde*stood1 that $any %ont*a%ts !n%-+de add!t!ona-
#o*d!n2 on the '-a%e o" de-!e*y. ;o* e6a$'-e1 the Mode- Cont*a%t s+22ested !n th!s ,oo. +ses the
"o--o#!n2 #o*d!n2 "o* CI; %ont*a%tsB
9e-!e*y o" the Aoods sha-- ,e $ade INCOTERM. The s%hed+-ed date o" de-!e*y sha-- ,e 9ATE
O; 9EGIDER:. R!s. and t!t-e to the Aoods sha-- 'ass "*o$ the se--e* to the ,+ye* on de-!e*y.
The '-a%e o" de-!e*y +nde* th!s Cont*a%t !s PORT O; SHIPMENT.
One "!na- %ons!de*at!on on the s+,Ce%t o" '-a%e. What ha''ens !" the sh!' na$ed ,y the ,+ye* !s -ate&
The 2oods a*e *eady1 ,+t the e6'o*te*1 th*o+2h no "a+-t o" h!s o#n1 %annot de-!e*. The %a*e"+-
e6'o*te* $a.es a s'e%!a- '*o!s!on to %oe* th!s '*o,-e$.
01
;o* e6a$'-eB
7777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777
0)
In%ote*$s 1@@). '. 1 1. The*e !s a "+-- d!s%+ss!on o" the In%ote*$s !n .Se%t!on < ,e-o#1
01
I" 'ay$ent !n s+%h a %ase !s $ade ,y Gette* o" C*ed!t1 !- !s e*y !$'o*tant "o* d!e e6'o*te* tha!
!he -et the Gette* o" C*ed!t a--o# s+,s-!t+t!on o" the #a*eho+se *e%e!'t "o* the ,!-- o" -ad!n2
I" the esse- na$ed ,y the B+ye* "a!-s to a**!e on o* ,e"o*e the a2*eed de-!e*y date1 then the Se--e*
$ay at h!s d!s%*et!on de-!e* the 2oods to a ,onded #a*eho+se !n the 'o*t o" Mo$,asa1 and sha-- ,e
dee$ed to hae "+-"!--ed h!s de-!e*y o,-!2at!ons +nde* th!s %ont*a%t.
C21E 1-0D7
Dea= on -ime
In '*e-!$!na*y ta-.s1 Ban2-adesh Stee- E6'o*t!n2 a2*ees #!th A-- A"*!%a Meta- to de-!e* 2oods to
Ga2os on o* ,e"o*e 14th A+2+st 1@@(. When the %ont*a%t !s d*a"ted1 !t $ent!ons the date as a2*eedl
14th A+2+st 1@@(. Be%a+se the N!2e*!an %o$'any has no sh!''!n2 a2ent !n Ban2-adesh1 !t as.s "o* a
CI; %ont*a%t +nde* Incoterms 1//8. The de-!e*y te*$s a*e a%%o*d!n2-y a2*eed !n the %ont*a%t as
"o--o#sB
9e-!e*y CI; MGa2os) on o* ,e"o*e 14th A+2+st 1@@(.
T*o+,-e !s no# a-$ost %e*ta!n. Why&
Tro/4%e is %ie%' 4e)a/se /nder this )ontra)t de%i&er' 5i%% tae p%a)e on or 4efore A/g/st 13
th
in .ang%adesh E notF as the 4/'er e&ident%' intendedF in ,agos! The expression C+8 (,agos)
means thatF in addition to maing de%i&er' in .ang%adeshF the exporter m/st pa' the )ost of
ins/ran)e and freight on to ,agos!
What :o+ Sho+-d /no#
1. The '-a%e Mand t!$e) o" de-!e*y $+st ,e +na$,!2+o+s-y a2*eed ,e%a+se $any %ont*a%t eents
M!n%-+d!n2 'ay$ent and t*ans"e* o" *!s. and t!t-e) a*e t!ed to de-!e*y.
0. The '-a%e o" de-!e*y sho+-d not ,e %on"+sed #!th the dest!nat!on o" the 2oods.
4. 9e-!e*y o" 2oods +nde* $ost e6'o*t %ont*a%ts ta.es '-a%e !n the %o+nt*y o" the e6'o*te*1 at the
do%.s !n the %ase o" sea t*ans'o*t1 and #hen the 2oods a*e handed oe* to the %a**!e* !n $ost othe*
%ases.
8. CI; and CIP %ont*a%ts a*e es'e%!a--y %on"+s!n2 s!n%e they na$e the 'o!nt o" dest!nat!on1 e.2.1 CI;
MGa2os). Ga2os1 !n th!s e6a$'-e1 !s the 'o!nt +' to #h!%h the e6'o*te* !s *es'ons!,-e "o* %osts1 not the
'-a%e o" de-!e*y.
*. TRANSPORTATION: V+n ,h-&.n
MC/ Goo 0o%ning1 #"ie! "n gent#e0en.
Fi%!t of "## 0"& I !"& th"n2 &o- fo% ,o0ing.
O-% g%o-3 t"2e! g%e"t 3#e"!-%e to t"#2 "4o-t t%"n!3o%t"tion1 e!3e,i"##& "4o-t the
t%"n!3o%t"tion in fo%eign t%"e.
Fi%!t1 M% Th"ng "n Mi!! Tho" 5i## i!,-!! the 3%o4#e0 in t%"n!3o%t"tion. Ne6t M%
H"o "n Mi!! T"0 5i## e63#"in !o0e !o#-tion! to the 3%o4#e0. An fin"##&1 Mi!!
M"i "n M% Ho"ng 5i## i!,-!! !o0e ,"!e !t-ie! in$o#$e.
No51 to 4egin1 M% Th"ng "n Mi!! Tho" 3#e"!e.
T,E 12-C+E.
For the e%porter transportation has two aspects6 the ph'sical
safet' of goods G which means appropriate packaging and
correct marking G and correct documentation.
5nless the shipping documents are in perfect order prompt
pa'ment under a letter of credit is difficult or impossible. $hat
are the dangers8
Dfn Sv
NhQ 6+ft .hg+ t*Td% fn Sv Zn %h+yVn
%|n %hi e Scn ha! .hja %snhB an toQn hQn2
h_a %r thV -Q S_n2 2_! Q 2h! .e $ h!`+
%n2 nhT ,Xo SX$ ,P %hxn2 ty 'hX!
.hd' d! nha+. Nc+ %R% %hxn2 ty Zn
%h+yVn .hpn2 t*n2 .hd' Q 6c' theo thx
ta th[ !`% thanh toRn sW .{o dQ! Q %_ .h!
.hpn2 thV tha% h!`n. D[ Zy *w! *o sW -Q 2[&
T,E 12IN4I1+E
The parties should state in their contract what packaging
should bear.
The e%porter must follow the agreement scrupulousl' or
pa'ment ma' be dela'ed.
The e%porter should ensure that the shipping documents
correspond e%actl' with the conditions of the letter of credit
and that the bill of lading is Fclean: otherwise again pa'ment
can be seriousl' dela'ed.
-nce the mode of transport Aroad rail air or shipB has been
negotiated three aspects of transportation feature in the
contract6 packaging shipping marks and shipping
documents.
First packaging. -ne primar' dut' of the e%porter is to ship
the goods in suitable packaging.
.ost national laws donHt sa' clear rules for this.
2ather than rel' on the law the e%porter and the bu'er
usuall' specif' the contract what packaging the' consider
ade!uate. ) t'pical clause6
NAU:N TC
CR% ,Nn %|n 2h! * t*on2 hU' S]n2 t*Nn
,ao ,[ 'hX! 2h! nhqn2 2[.
Nc+ nhQ 6+ft .hg+ .hpn2 tha% h!`n Sin2
theo hU' S]n21 thanh toRn %_ thV ,\ t*[
hon.
NhQ 6+ft .hg+ 'hX! SX$ ,Xo *hn2 %R%
%hxn2 ty Zn %h+yVn 'hX! .hd' d! thT tjn
drn2 Q Zn S}n 'hX! Kss%hK1 nc+ .hpn21
n2n hQn2 sW %_ %d t*[ hon thanh toRn.
MPt .h! SQ$ 'hRn 6on2 'hT}n2 thx% Zn
tX! MSTun2 ,P1 STun2 sOt1 STun2 hQn2
.hpn21 tQ+ ,!Vn)1 %hin2 ta %|n 'hX! %hi
t*~n2 Scn ,a nP! d+n2 -!Nn >+an Scn Zn
%h+yVn 2h! t*on2 hU' S]n2B ,ao ,[1 .e $
h!`+1 Q %R% %hxn2 ty Zn %h+yVn.
|+ t!Nn1 S_n2 2_!. MPt t*on2 nhqn2
nh!`$ r %hjnh %wa n2Tu! 6+ft .hg+ -Q
Zn %h+yVn hQn2 STU% S_n2 2_! 'h hU'.
Nh!v+ >+% 2!a .hpn2 %_ -+Zt -` * *Qn2 v
>+y %R%h S_n2 2_!.
Thay [ daa Qo 'hR' -+Zt1 nhQ 6+ft .hg+
Q nhZ' .hg+ thTun2 %r thV h_a S_n2 2_!
t*on2 hU' S]n2. !v+ .hoXn t!N+ ,!V+ sW
nhT sa+ SyB

97oods are to be packed in new strong wooden cases suitable for long@distance ocean
transport and are to be well protected against dampness shock rust or rough handling.
The 3E++E2 shall be liable for an' damage to or loss of the 7oods attributable to
improper or defecti"e packaging.9
HQn2 h_a 'hX! STU% S_n2 2_! t*on2 thn2 2 $d!1 %hO% %hOn Q 'h hU' %ho Zn %h+yVn hQn2 hX!
STun2 dQ! Q 'hX! %_ ,~%1 -_t %hn2 g$. s%1 hoen * hay ,% db .hpn2 %gn thZn. N2Tu! ,Rn 'hX!
%h\+ t*R%h nh!`$ t*Td% $~! tn thft hQn2 h_a do S_n2 2_! .hpn2 'h hU' hay th!c+ s_t.
Th!s #o*d!n2 $a.es the *e>+!*e$ents %-ea*1 and
!t '+ts the ,-a$e "!*$-y on the sho+-de*s o" the
e6'o*te* !" 'a%.a2!n2 !s !nade>+ate.
Th*ee 'a%.a2!n2 '*o,-e$s a*e #o*th $ent!on!n2
he*e een tho+2h they a*e $atte*s o" '+,-!% -a#
and o+ts!de the d!*e%t s%o'e o" the %ont*a%tB
o Pa%.a2!n2 o" dan2e*o+s 2oods !s s+,Ce%t to
s'e%!a- *e2+-at!ons !n a-- %o+nt*!es.
The e6'o*te* sho+-d as. "o* !nst*+%t!ons "*o$ the
,+ye* !" dan2e*o+s 2oods a*e !n >+est!on.
o So$e nat!ona- -a#s *e>+!*e "+$!2at!on o" a--
%onta!ne*s ente*!n2 the %o+nt*y.
o A2*!%+-t+*e7,ased1 dee-o'ed e%ono$!es Ms+%h
as that o" A+st*a-!a) tend to '-a%e see*e
*est*!%t!ons on 'a%.a2!n2 $ate*!a-s. Hay1 st*a#
and *!%e h+s.s a*e o"ten "o*,!ddenm #ooden
'a%.a2!n2 $+st o"ten ,e "+$!2ated.
I" !n do+,t1 the e6'o*te* sho+-d %ons+-t the ,+ye*
o* the %ons+-ate o" the !$'o*t!n2 %o+nt*y.
1.ipping Marks
N2pn n2q 'hX! nN+ thZt * yN+ %|+1 Q nc+ ,ao ,[
.hpn2 Sin2 >+y %R%h1 nhQ 6+ft .hg+ %hjnh -Q
n2Tu! 'hX! 2Rnh hct t*R%h nh!`$.
Ba fn Sv -!Nn >+an Scn S_n2 2_! %|n STU% Sv
%Z' ^ Sy $z% d S_ -Q nhqn2 fn Sv -!Nn >+an
Scn %pn2 'hR' Q .hpn2 th+P% -nh a% hU'
S]n2B
o Bao ,[ %wa hQn2 n2+y h!V$ 'hX! t+n thw %R%
>+y S\nh %wa nhQ nTd% ^ tft %X %R% >+% 2!a.
NhQ 6+ft .hg+ nNn nhu n2Tu! nhZ' .hg+ %h dtn
%r thV nc+ $[nh %hTa ,!ct * hQn2 h_a S_ >+y
S\nh %hz% %h v ,ao ,[ hay .hpn2.
o MPt s -+Zt >+% 2!a yN+ %|+ 6pn2 .h_! .h
t*n2 %wa tft %X %R% %onta!ne* nhZ' %Xnh.
o CR% nvn .!nh tc 'hRt t*!Vn daa t*Nn npn2 n2h!`'
MnhT A+st*a-!a) %_ nhqn2 hsn %hc *ft n2h!N$
n2zt v Zt -!`+ S_n2 2_!.
CY .hp1 *}$ *s Q t*f+ thTun2 ,\ %f$m Zt -!`+
S_n2 2_! ,hn2 2 'hX! STU% 6pn2 .h_! .h t*n2.
Nc+ n2h! n2u1 6+ft .hg+ nNn tha$ .hXo e .!cn
%wa n2Tu! $+a hoz% -nh sa >+Rn %wa nTd% nhZ'
Sh!''!n2 $a*.s1 -!.e the add*ess on an ene-o'e1
$+st ,e t!2ht-y %ont*o--ed. The t#o s!des sho+-d
d!s%+ss e6a%t-y #hat !s *e>+!*ed. A ty'!%a- -!st o"
$a*.s !n a-- e6'o*t %ont*a%t -oo.s -!.e th!sB
.hg+. DZn %h+yVn Ma*.s nhn h!`+ Zn %h+yVn1
2!n2 nhT S\a %h t*Nn 'hon2 ,[1 'hX! STU% .!V$
soRt %hzt %hW. Ha! ,Nn %|n thXo -+Zn v %hjnh 6R%
nhqn2 2[ -Q %|n th!ct. MPt danh sR%h S!Vn h[nh
%wa %R% nhn h!`+ t*on2 hU' S]n2 6+ft .hg+ a!-
t*pn2 nhT thc nQyB
On the s+*"a%e o" ea%h 'a%.a2e de-!e*ed +nde* th!s Cont*a%t sha-- ,e $a*.edB the
'a%.a2e n+$,e*1 the $eas+*e$ents o" the 'a%.a2e1 2*oss #e!2ht1 net #e!2ht1 the
-!"t!n2 'os!t!on1 the -ette* o" %*ed!t n+$,e*1 the #o*ds THE RIAHT SI9E UP1
HAN9GE WITH CARE1 /EEP 9R:1 and the $a*.s 9NP 4<Q.
TrCn mDi 4iEn *Fn$ GHIc $iao t*eo *Ip GJn$ nFy p*Ki $*i 4L mM *iE! bao $Jm sN t*O tP,
4Qc* t*HRc, trSn$ lHIn$ t*T, trSn$ lHIn$ tUn*, vU trQ nVn$ cWa 4iEn *Fn$, sN LX, t*Cm n*Yn$
tZ p*[ bi\n 4*]c n*H ^IN _` _aN? HIbc, dn THeN fHI Bg Dh, iN _` NjI fHk
RlO, vF n*Yn$ mM sN n*H 9NP 4<Q.
So$e o" these $a*.s a*e %on%e*ned #!th
!dent!"y!n2 the 2oods1 so$e #!th hand-!n2 Me.2 1
#e!2ht and KR!2ht S!de -H'K). and so$e #!th
2oe*n$ent *e2+-at!ons Me.2.1 Indones!an '*a%t!%e
*e>+!*es that 2oods so-d +nde* a -ette* o" %*ed!t
$+st ,ea* the n+$,e* o" the %*ed!t on the
'a%.a2!n2m 'ay$ent +nde* the -ette* o" %*ed!t
$ay ,e d!""!%+-t !" th!s !s not done.) On%e
a2*ee$ent has ,een *ea%hed1 the e6'o*te* sho+-d
,e s%*+'+-o+s-y %a*e"+- a,o+t '*!nt!n2 a-- the
ne%essa*y $a*.sB othe*#!se1 as #e sha-- see !n
the ne6t se%t!on1 the ,an. $ay *e"+se to 'ay
+nde* the -ette* o" %*ed!t.
MPt s %R% nhn h!`+ %_ -!Nn >+an d! 6R% S\nh
%R% hQn2 hoR1 6 -e Mj dr1 t*~n2 -TUn2 Q KR!2ht
S!de -H'K). Q $Pt s >+y S\nh %wa %hjnh 'hw Mj
dr nhT Indones!a tha% hQnh yN+ %|+ hQn2 hoR
,Rn *a theo thT tjn drn2 'hX! %_ s -TUn2 tjn
drn2 t*Nn ,ao ,[1 thanh toRn theo thT tjn drn2 %_
thV .h_ .hn nc+ S!v+ nQy .hpn2 STU% tha%
h!`n.) Sa+ .h! thYa th+Zn S STU% Sst1 6+ft .hg+
'hX! STU% n2h!N$ n2zt %gn thZn v !`% !n tft %X
%R% df+ h!`+ %|n th!ctB nc+ .hpn21 %hin2 ta sW
thfy t*on2 'h|n t!c' theo1 n2n hQn2 %_ thV ty
%h! t*X t!vn theo thT tjn drn2.
1.ipping Do9ments
We $+st no# 2-an%e ahead and d!s%+ss ,*!e"-y
'ay$ent ,y -ette* o" %*ed!t. The e6'o*te* has
"+-"!--ed h!s $aCo* d+t!es +nde* $ost e6'o*t
%ont*a%ts #hen he 'asses to the %a**!e* %o**e%t
%ont*a%t 2oods. At th!s 'o!nt1 he !s ent!t-ed to
'ay$ent. The '*o,-e$ !s1 o" %o+*se1 that 2oods
a*e +s+a--y 'assed to a %a**!e* !n the e6'o*te*Hs
o#n %o+nt*y #ee.s1 o* $onths1 ,e"o*e the
!$'o*te* has the %han%e to e6a$!ne the$. To
a--o# 'ay$ent at th!s ea*-y sta2e1 !nte*nat!ona-
%o$$e*%e has dee-o'ed the -ette* o" %*ed!t.
Ho# does the -ette* o" %*ed!t #o*.&
08
In ,*!e"1 the
,+ye* a**an2es #!th a ,an. !n the e6'o*te*Hs
%o+nt*y to 'ay a %e*ta!n s+$ o" $oney M+s+a--y
the tota- !no!%e '*!%e) as soon as the 2oods a*e
sh!''ed. O,!o+s-y the e6'o*te* $+st prove to
the ,an. that sh!'$ent has ta.en '-a%e as a2*eed
#!th the ,+ye*. As '*oo" the ,an. a%%e'ts the
s*ippin$ +oc!ments. The te6t o" the -ette* o"
%*ed!t %onta!ns a -!st o" sh!''!n2 do%+$ents1
so$et!$es a e*y deta!-ed -!st. A"te* the ,an. !s
sat!s"!ed that the sh!''!n2 do%+$ents tende*ed ,y
the e6'o*te* a*e e6a%t-y !n o*de*1 !t 'ays the
a2*eed s+$. What1 then1 a*e these sh!''!n2
do%+$ents&
DZn %h+yVn tQ! -!`+ Chin2 tp! ,y 2!u 'hX! -Tdt
>+a t*Td% Q thXo -+Zn v $Pt thu! 2!an n2On
thanh toRn ,hn2 thT tjn drn2. NhQ 6+ft .hg+ S
hoQn thQnh n2ha r theo h|+ hct %R% hU' S]n2
6+ft .hg+ -dn %wa pn2 .h! pn2 %h+yVn hQn2 hoR
Zn %h+yVn hU' S]n2 %hjnh 6R%. Ts! thu! S!V$
nQy1 pn2 %_ >+yvn SV thanh toRn. Dfn Sv -Q1 tft
nh!Nn1 hQn2 hoR thTun2 STU% thpn2 >+a %ho hn2
t*on2 t+|n Sft nTd% %wa ,Nn 6+ft .hg+1 hoz% Q!
thRn21 t*Td% .h! nhZ' .hg+ %_ %} hP! SV 6e$ 6{t.
V %ho 'h{' thanh toRn ^ 2!a! Sosn nQy S|+1
thT}n2 $s! >+% tc S 'hRt t*!Vn %wa tjn drn2
thT. ThT tjn drn2 -Q$ !`% nhT thc nQo& 08 T_$
-s!1 n2Tu! $+a th+ 6c' d! $Pt n2n hQn2 ^ nTd%
6+ft .hg+ 'hX! t*X $Pt s t!vn nhft S\nh MthTun2
-Q 2!R tn2 hoR S}n) n2ay sa+ .h! hQn2 hoR STU%
Zn %h+yVn. R *Qn2 -Q nhQ 6+ft .hg+ 'hX! %hxn2
$!nh %ho n2n hQn2 *hn2 -p hQn2 S STU% tha%
h!`n theo thoX th+Zn d! n2Tu! $+a. MPt ,hn2
%hxn21 n2n hQn2 %hf' nhZn %R% tQ! -!`+ Zn
%h+yVn. CR% n ,Xn %wa tjn drn2 thT %_ %hxa
$Pt danh sR%h %hxn2 ty Zn %h+yVn1 Sp! .h! $Pt
danh sR%h *ft %h! t!ct. Sa+ .h! n2n hQn2 STU%
hQ! -n2 *hn2 %R% tQ! -!`+ Zn %h+yVn Sf+ th|+
%wa nhQ 6+ft .hg+ -Q %hjnh 6R% theo thx ta1 n_ t*X
t!vn s t!vn S thYa th+Zn. 1 Sa+ S_1 %R% tQ! -!`+
nQy Zn %h+yVn&
777777777777777777777777777777777777777777777777777777777777777777777777777777777777777
08
Cha'te* 01 Se%t!on 8 dea-s #!th the -ette* o" %*ed!t !n deta!-
The $ost !$'o*tant sh!''!n2 do%+$ent !s !ss+ed ,y the %a**!e* #hen the e6'o*te* hands oe*
the 2oods !o* t*ans'o*tat!onl!t 2oes +nde* $any na$es1 ,+t !n 2ene*a- #e %an %a-- !t the
"aybill. Way,!--s "a-- !nto t#o 2*o+'s #!th s-!2ht-y d!""e*ent *+-es atta%hed to the$. The "!*st
ty'e !s the t*ad!t!ona- $a*!ne ,!-- o" -ad!n2 #h!%h !s +sed "o* t*ans'o*t ,y sh!'. The se%ond
ty'e !n%-+des sh!''!n2 do%+$ents !ss+ed ,y a!*-!nes Mthe a!* #ay,!--)1 ,y *a!-#ays Mthe *a!-
%ons!2n$ent note)1 and ,y *oad ha+-!e*s Mthe *oad %ons!2n$ent note). S!n%e $any 2oods
today a*e %onta!ne*!Eed1 and s!n%e %onta!ne*s $oe ,y *oad1 *a!-1 sh!' and a!*1 a %o$,!ned
t*ans'o*t ,!-- o" -ad!n2 !s +sed to %oe* $+-t!7$ode t*ans'o*t. On the ne6t 'a2es yo+ #!-- see
a ,-an. e6a$'-e o" ea%h ty'e o" do%+$ent $ent!oned a,oe.
A Marine Bill of Lading () *+,
Most $a*!ne ,!--s o" -ad!n2 today +se the d+a- '+*'ose "o*$ M$a*!ne%o$,!ned t*ans'o*t)
sho#n ,e-o# *athe* than the t*ad!t!ona- "o*$ *ese*ed '+*e-y "o* sh!'s. M;o* a %o$'-eted
$a*!ne ,!-- o" -ad!n21 see the oncept Revie"- Barnacle Bill ,e-o#.)
An Air #a-bill ()*.,
The a!* #ay,!-- !s !ss+ed ,y an a!*-!ne #hen !t ta.es oe* the 2oods "*o$ the e6'o*te*.
A Rail Consignment Note () */,
I" 2oods a*e sh!''ed ,y *a!-1 the *a!-*oad %o$'any !ss+es a *a!- %ons!2n$ent note. A-tho+2h
the*e !s a standa*d !nte*nat!ona- "o*$ Mthe so7%a--ed CIM "o*$)1 $ost *a!- %ons!2n$ent notes
!n dee-o'!n2 %o+nt*!es -oo. $o*e -!.e the e6a$'-e sho#n.
A Road Consignment Note () *0,
A t*+%.!n2 %o$'any !ss+es a *oad %ons!2n$ent note on ta.!n2 oe* the 2oods. O" a-- the
sh!''!n2 do%+$ents1 the *oad %ons!2n$ent note !s the -east standa*d!Eed. The e6a$'-e ,e-o#
sho#s the ty'!%a- ent*!es.
A Combined Transort Bill of Lading () *1,
KCo$,!ned t*ans'o*tK !s the $ost %o$$on te*$ "o* sh!'$ent !n a %onta!ne* s!n%e t*+%.s1
t*a!ns1 sh!'s and '-anes %an a-- hand-e %onta!ne*s.

2n 2ir)a$ 4i##
2 rai# Consignment Note
2 Roa= Consignment Note
2 Com"ine= -ransport 4i## of La=ing
The Marine Bill of Ladin and O!her Tran"#or! $o%&'en!"
The distinction between marine bills of ladding and the other transport documents is sometimes
important as we shall now see. The marine bill of ladding is the traditional document used for shipment
b' sea. ) marine CI+ must indicate that the goods ha"e been loae on boar a name vessel a stamp
on the face of the CI+ confirms this6

The marine bill of lading is special6 if the parties so wish it can be made a negotiable document Ain
other words it can be sold or boughtB. $h' would an'one bu' a bill of lading8 3impl' because the
person who holds a bill of lading owns Aor has title toB the goods described. This is an important aspect
of commodit' trading6 a cargo G for e%ample the cargo of an oil tanker loaded in the 7ulf G ma' be sold
se"eral times during its "o'age. If such a sale is foreseen the parties make the bill of lading negotiableJ
if howe"er the consignee Ai.e. in most cases the bu'erB intends to recei"e the goods personall' there
is no reason for a negotiable bill of lading.
In practice how do 'ou make a bill of lading negotiable8 )nd how can 'ou tell if a bill is negotiable or
not8 The answer lies in the first few lines of document. First an e%ample of a negotiable bill of lading
AT'ping the word F-rder: or Fblank: in the 4onsignee bo% makes the bill of lading negotiable.
Incidentall' the use of the word F-rder: means that the shipper must endorse the bill Asign it on the
backB. Cut when 'ou write the name of a person or an organization in the 4onsignee bo% the bill is not
negotiable. B
Then the "!*st "e# -!nes o" a non7ne2ot!a,-e ,!--B
The d!""e*en%e -!es s!$'-y !n the +se o" the #o*d KO*de*K !n the Cons!2nee ,o6. Ty'!n2 the
#o*d KO*de*K $a.es the ,!-- o" -ad!n2 ne2ot!a,-e. In%!denta--y1 the +se o" the #o*d KO*de*K
$eans that the sh!''e* $+st endo*se the ,!-- Ms!2n !t on the ,a%.).
(lean Shi##in do%&'en!)
E%port goods are e%amined fre!uentl' on their Kourne' from bu'er to seller. There is often a
pre@shipment inspectionsJ customs officers e%amine the goods at e"er' border. ) carrier of
course e%amines not the goods themsel"es but their packaging and general appearance. If
an'thing is wrong the carrier notes the deficienc' on the face of the bill of lading or other
shipping document. The carrier might note for e%ample
4ontents leaking
1ackaging soiled b' contents
1ackaging brokenI holed I tornI damaged
1ackaging contaminated
7oods damagedI scratched
7oods chafedI tornI deformed
1ackaging badl' dented
1ackaging damaged G contents e%posed
Insufficient packaging
What e""e%t does s+%h a note hae& In 1@8@ the Inte*nat!ona- Cha$,e* o" Co$$e*%e !ss+ed a
'a$'h-et ent!t-ed lean Transport Doc!ments MP+,-!%at!on No. 8=4). Th!s 'a$'h-et
d!st!n2+!shes ,et#een cle!n do%+$ents and cla!se+ Mo* !nclean7 do%+$ents. The *e$a*.s !n
a cla!se+ do%+$ent $a.e !t +na%%e'ta,-e to a ,an.m a -ette* o" %*ed!t #!-- not ,e 'a!d a2a!nst
a %-a+sed sh!''!n2 do%+$ent.
Se% Cha'te* 41 Se%t!ons 1 and 0 "o* deta!-ed !n"o*$at!on on !ns'e%t!on
Not a-- notes1 ho#ee*1 a*e %ons!de*ed to ,e K%-a+ses.K ;o* e6a$'-eB
,econ+m*an+Xrecon+itione+ pac4a$in$ materials !se+ Pac4a$in$
repaire+Xmen+e+Xrese"nXcoopere+ cnprotecte+ cnbo)e+
S+%h *e$a*.s a*e not eno+2h $a.e the ,!-- o" -ad!n2 K+n%-ean.K To ao!d d!s'+tes1 the t#o
s!des to the %ont*a%t o"ten a2*ee that the -ette* o" %*ed!t #!-- s'e%!"y K%-a+sesK that1 !n the!*
'a*t!%+-a* -!ne o" ,+s!ness1 #o+-d ,e +na%%e'ta,-e. ;o* e6a$'-e1 !n sh!''!n2 !*on '*od+%ts1
the 'a*t!es $!2ht a2*ee that no *+st at a-- !s a--o#edm th+s the %-a+se KSo$e *+st s'otsK #o+-d
*es+-t !n an +n%-ean t*ans'o*t do%+$ent.
One s!t+at!on that so$et!$es a*!ses !s dan2e*o+s "o* the e6'o*te*. The %a**!e* !s ta.!n2 oe*
2oods at the e6'o*te*Hs "a%to*y. The %a**!e* e6a$!nes the 'a%.a2!n2 %*!t!%a--y and de%!des to
#*!te the %-a+se KIns+""!%!ent 'a%.a2!n2.K An a*2+$ent ,*ea.s o+t. To *eso-e the a*2+$ent1
the e6'o*te* o""e*s the %a**!e* an K!nde$n!tyKla s+$ o" $oney Mo* a '*o$!se o" s+%h a s+$)
to %oe* any -osses the %a**!e* $!2ht !n%+* !" the ,+ye* %o$'-a!ns a,o+t the %ond!t!on o" the
2oods #hen they a**!e. Th!s !s e*y %-ose to a ,*!,e. lean Transport Doc!ments %o$$entsB
Co+*ts !n see*a- %o+nt*!es hae *+-ed that the %a**!e* #ho a%%e'ts s+%h an !nde$n!ty...!s an
a%%o$'-!%e !n de%e!t o* "*a+d on the ,+ye* and the !nde$n!ty !tse-" !s !--e2a- and o!d M'. =).
The 'ay$ent o" an K!nde$n!tyK %o+-d *es+-t !n '*ose%+t!on "o* "*a+d.
C21E 1-0D7
4arna#e 4i##
St+dy the B!-- o" Gad!n2 ,e-o# and then ans#e* the >+est!ons ,e-o#.
1. I" a -ette* o" %*ed!t *e>+!*ed a KMa*!ne B!-- o" Gad!n21K #o+-d th!s do%+$ent ,e a%%e'ta,-e&
:ES NO
0. I" :ES1 ho# do yo+ .no#& .................................................................
It !s sta$'ed #!th a 5sh!''ed on ,oa*d? sta$'1 and a esse- !s na$ed.
4. A $a*!ne ,!-- o" -ad!n2 !s so$et!$es ne2ot!a,-e. I" th!s !s a $a*!ne ,!-- o" -ad!n21 !s !t
ne2ot!a,-e& H
:ES NO IT IS NOT A MARINE BIGG O; GA9INA
8. I" :ES o* NO1 ho# do yo+ .no#& .........................................................
The %ons!2nee ,o6 !n a ne2ot!a,-e BG !s $ade o+t 5To O*de*?.
:.at 7o9 1.o9#= ;no)
1. The %ont*a%t sho+-d s'e%!"y the ty'e o" 'a%.a2!n2 and the sh!''!n2 $a*.s a2*eed ,y the
'a*t!es.
0. On de-!e*y1 the e6'o*te* *e%e!es "*o$ the %a**!e* the $ost !$'o*tan a-- the sh!''!n2
do%+$ents1 the ,!-- o" -ad!n2 Mo* %ons!2n$ent note).
4. Ea%h $ode o" t*ans'o*t has a %ha*a%te*!st!% sh!''!n2 do%+$entB the $a*!ne ,!-- o" -ad!n21
the a!* #ay,!--1 the *a!- %ons!2n$ent note1 and t- *oad %ons!2n$ent note a*e the $ost
%o$$on. Co$,!ned t*ans'o*t M%onta!ne* t*ans'o*t) +ses a %o$,!ned t*ans'o*t ,!-- o" -ad!n2.
8. Unde* %e*ta!n %!*%+$stan%es1 a $a*!ne ,!-- o" -ad!n2 %an ,e $ade !nt% ne2ot!a,-e
do%+$ent.
(. The $a*!ne ,!-- o" -ad!n21 to ,e a%%e'ta,-e as a sh!''!n2 do%+$ent +nde* a -ette* o" %*ed!t1
$+st ,ea* the notat!on that the 2oods hae ,een sh!''ed on ,oa*d a na$ed esse-.
<. Pay$ent +nde* a -ette* o" %*ed!t de'ends -a*2e-y on the %o**e%tness ! the sh!''!n2
do%+$ents.
=. Pay$ent +nde* a -ette* o" %*ed!t $ay ,e de-ayed !" the -ette* o" %*ed!t *e'eats e6a%t-y the
%ont*a%t+a- 'a%.a2!n2 *e>+!*e$ents ,+t the e6'o*te* has "a!-ed to $eet the$.
8. The %a**!e* #!-- note any de"e%ts !n the 'a%.a2!n21 #e!2ht o* 2ene*a- a''ea*an%e o" the
2oods on a%%e't!n2 the$ "*o$ the e6'o*te*. MThe %a**!e* does not !ns'e%t the 2oods
the$se-es1 on-y the 'a%.a2!n2.) ,e a%%e'ta,-e +nde* a -ette* o" %*ed!t1 a-- sh!''!n2
do%+$ents $+st , K%-ean1K !.e.1 "*ee o" notes a,o+t de"e%ts.
((7<8
'. RI1;, -I-LE 2ND IN10R2NCE
-5E +R34LEM
R!s.s to one3s '*o'e*ty $+st ,e !ns+*ed1 ,+t !ns+*an%e o" e6'o*ted 2oods !s a d!""!%+-t "!e-d
"o* the -ay$an. The e6'o*te* $+st ,e a,-e to de%!de #hat .!nd o" 'o-!%y o* !ns+*an%e %oe* !s
ne%essa*y1 and #hat *!s.s $+st ,e %oe*ed.
-5E +RINCI+LE
Most e6'o*te*s '*e"e* an o'en %oe* a**an2e$ent1 #!th the 2oods a-+ed and !ns+*ed "*o$
'o!nt7to7'o!nt. The e6'o*te* sho+-d %ons+-t a ,*o.e* to ens+*e that a-- e6'e%ted *!s.s a*e
%oe*ed.
M3RE DE+-5
We hae a-*eady sa!d that *!s.s +s+a--y 'ass on de-!e*y. T#o *!s.s a*e !no-ed !n the sa-e o"
2oodsB the *!s.s o" 2oods !nC+*!n2 a th!*d 'a*ty and the $o*e s!2n!"!%ant *!s. o" -oss o*
da$a2e. These *!s.s a*e no*$a--y %oe*ed ,y !ns+*an%e.
-ransfer of -it#e
O#ne*sh!' Mt!t-e) !s a %o$'-!%ated '*o,-e$. Nat!ona- -a#s do not a2*ee on a 'o!nt #hen
o#ne*sh!' o" 2oods 'asses "*o$ e6'o*te* to ,+ye*. The *an2e !s #!deB "*o$ s!2nat+*e o"
%ont*a%t to "!na- 'ay$ent. The $atte* !s1 ho#ee*1 d!s'os!e Many e6'o*te*s -!.e to .ee'
-e2a- o#ne*sh!' o" 2oods +nt!- "+-- 'ay$ent !s $ade1 see!n2 o#ne*sh!' as se%+*!ty "o* 'ay7
$ent. Many Kh!*e '+*%haseK a2*ee$ents #o*. -!.e thatB the ,+ye* 'ays !n !nsta--$ents1 ,+t
o"ns the 2oods on-y #hen the -ast !nsta--$ent !s 'a!d. In !nte*nat!ona- t*ade1 ho#ee*1
o#ne*sh!' !s o" do+,t"+- a-+e. I" AE!E sends sha$'oo to E-s'e*anEa and the !no!%e !s not
'a!d1 o#ne*sh!' !s o" -!tt-e '*a%t!%a- a-+eB she !s +n-!.e-y to *e%oe* the 2oods s!n%e they
$+st 'ass th*o+2h t#o sets o" %+sto$s on the!* t*!' ho$eB !" she se--s the 2oods !n Es'e*anEa1
she #!-- 2et -!tt-e "o* the$. In any %ase1 he* %osts #!-- '*o,a,-y e6%eed the $oney she
*e%oe*s. A%%o*d!n2-y1 s!n%e o#ne*sh!' !s o" -!tt-e '*a%t!%a- a-+e1 $any %ont*a%ts s'e%!"y
thatB
Ins9rane: :.o 1.o9#= Ins9reZ
Ma*!ne !ns+*an%e !s "!*st "o+nd !n Ita-y !n the 14))Hs. O*!2!na--y1 !t %oe*ed on-y
t*ans'o*t !n sh!'s Mst!-- %a--ed a+vent!res ,y !ns+*e*s). Today1 ho#ee*1 $ost $a*!ne !ns+*an%e
'o-!%!es !n%-+de the T*ans!t C-a+se #h!%h %oe*s the 2oods "*o$ the e6'o*te*Hs #a*eho+se to
the ,+ye*Hs #a*eho+se 7o"ten #!th a -on2 st*et%h oe*-and at ea%h end o" the Co+*ney. S!n%e
$e*%hand!se !s at *!s. at a-- t!$es d+*!n2 !ts Co+*ney1 !t !s ad!sa,-e to !ns+*e the 2oods at
ee*y sta2e. T#o '-aye*s a*e !no-ed he*eB e6'o*te* and ,+ye*. Wh!%h !s *es'ons!,-e "o*
a**an2!n2 !ns+*an%e %oe*&
In de%!d!n2 #ho sho+-d !ns+*e1 the*e a*e t#o s%hoo-s o" tho+2ht. The "!*st sees the
'o!nt o" de-!e*y as de%!s!em +' to de-!e*y the e6'o*te* !ns+*esB a"te* de-!e*y the ,eye*
does. The se%ond a''*oa%h -!es ,eh!nd C Te*$ MCI;1 CIP)B the ,+ye* o"ten has '*o,-e$
!ns+*!n2 "o* 2oods that $ay not yet e6!st and that1 !n $any %ases1 a*e -o%ated !n a d!stant
%o+nt*y. It !s o"ten eas!e* "o* the e6'o*te* to a**an2e !ns+*an%eB "!*st1 $any e6'o*te*s hae a
stand!n2 a**an2e$ent #!th an !ns+*an%e %o$'anym se%ond-y1 they %an *ead!-y de%-a*e to an
!ns+*e* the ne%essa*y deta!-s o" the!* '*od+%ts.
The %ho!%es a*e %-ea*l!t !s +' to the t#o s!des to *ea%h a2*ee$ent on the te*$s that
,est $eets the!* needs. One !$'o*tant note1 ho#ee*B
The ,+ye* sho+-d note that +nde* the CI; te*$ the se--e* !s on-y *e>+!*ed to o,ta!n
!ns+*an%e on $!n!$+$ %oe*a2e.
0<
KM!n!$+$ %oe*a2eK !s the so7%a--ed Ca*2o C-a+se C d!s%+ssed ,e-o#. Ca*2o C-a+se C !s
des!2ned "o* !ns+*!n2 ,+-. %a*2olnot $a%h!ne*y1 te6t!-es1 'a'e* o* othe* h!2h *!s. %a*2oes. A
,+ye* #ho #ants $o*e than $!n!$+$ %oe*a2e $+st ne2ot!ate th!s #!th the e6'o*te*.
No*$a--y !ns+*an%e %oe* +nde* CI; Mand CIP) %ont*a%ts !s "o* the a-+e o" the 2oods '-+s
1)n Mthe e6t*a 1)n a--o#s "o* the e6'e%ted '*o"!t o" the ,+ye*)m %oe* !s 2ene*a--y !n the
%+**en%y o" the %ont*a%t.
7777777777777777777777777777777777777
2.
Incoterms 1//8, '.().
In a CI; Mo* CIP) %ont*a%t1 the 2oods a*e de-!e*ed to the ,+ye* at the 'o*t Mo* '-a%e) o"
sh!'$ent. On de-!e*y1 the 2oods ente* the ,+ye*Hs a*ea o" *!s.. The !ns+*an%e %oe* he-d ,y
the e6'o*te* *+ns to the 'o*t o* '-a%e o" a**!a-. Th!s !s a '*o,-e$B ho# does an !ns+*an%e
'o-!%y he-d ,y the e6'o*te* he-' the ,+ye* !" the 2oods a*e da$a2ed o* -ost d+*!n2 sh!'$ent&
The ans#e* !s assi$nment. By endo*s!n2 the %e*t!"!%ate o" !ns+*an%e1 the e6'o*te* %an ass!2n
Mt*ans"e*) the "+-- *!2hts to the ,+ye*. I" ne%essa*y1 th!s %an ,e done een a"te* 2oods a*e -ost.
0=
Polic-" Certificate" or Letter of Ins&rance3
An !ns+*an%e 'o-!%y !s a "a$!-!a* do%+$ent to $ost 'eo'-eB "!*e !ns+*an%e1 eh!%-e !ns+*an%e1
-!"e !ns+*an%el$ost o" +s hae s+%h 'o-!%!es. ;o* !nte*nat!ona- t*ade1 ho#ee*1 the "+--
'o-!%y '*esents %e*ta!n '*o,-e$sB
The '*e'a*at!on o" a 'o-!%y o" !ns+*an%e -a.es so$e -!tt-e 6 consi+erable, E+.7 t!$e1
'a*t!%+-a*-y !" the*e a*% a n+$,e* o" +nde*#*!te*s o* see*a- !ns+*an%e %o$'an!es1 and
#hen do%+$ents *e>+!*e to ,e tende*ed #!th '*o$'tness on the a**!a- o" a stea$e* !n
o*de* tha! e6'ense $ay not ,e !n%+**ed th*o+2h de-ay !n +n-oad!n2...1 !t !s not a-#ays
'*a%t!%a,-e to o,ta!n a%t+a- 'o-!%!es o" !ns+*an%e. In o*de* to "a%!-!tate ,+s!ness !n
%!*%+$stan%es s+%h as these1 ,+ye*s a*% a%%o*d!n2-y !n !he ha,!t o" a%%e't!n2 ,*o.e*sH
%oe* notes and certi#icates o# in ins!rance !nstead o" !ns!st!n2 on 'o-!%!es.
08
What !s a K%e*t!"!%ate o" !ns+*an%eK& Many e6'o*te*s hae an a2*ee$ent #!th an !ns+*an%e
%o$'any %oe*!n2 all the!* sh!'$ents oe* a 'e*!od o" t!$e. Ha%h !nd!!d+a- sh!'$ent !s
%oe*ed ,y a certi#icate o# ins!rance, not ,y a "+-- 'o-!%y. MA "+-- 'o-!%y %an no*$a--y ,e
!ss+ed "o* an !nd!!d+a- %ons!2n$ent !" the ,+ye* #ants th!s.) A %e*t!"!%ate o" !ns+*an%eB
o States !n o+t-!ne the %oe* o""e*edm
o A!es the deta!-s o" the !nd!!d+a- sh!'$ent.
Unde* En2-!sh -a# at -east1 the e""e%t o" a %e*t!"!%ate o" !ns+*an%e !s !*t+a--y !dent!%a- #!th
that o" a "+-- 'o-!%y. In add!t!on to the %e*t!"!%ate o" !ns+*an%e1 the*e !s a-so the so7%a--ed letter
o# ins!rance. Th!s !s s!$'-y a -ette* "*o$ the e6'o*te* to the ,+ye* stat!n2 that the 2oods a*e
!ns+*ed. It has no -e2a- "o*%e e6%e't as e!den%e !n a -a# s+!t a2a!nst the e6'o*te*.
-$pes of Ins9rane po#i$: (#oating +o#i$ an= 3pen Co&er.
So$et!$es an e6'o*te* dea- !s +n!>+e s'e%!a- e>+!'$ent !s ,+!-t and sh!''ed !n an +n+s+a-
#ay to an +n"a$!-!a* dest!nat!on. In s+%h a s!t+at!on1 the e6'o*te* M+s+a--y #!th the he-' o" a
,*o.e*) ne2ot!ates a s'e%!a- !ns+*an%e 'o-!%y. No*$a--y1 ho#ee*1 an e6'o*te* #!th $any
s!$!-a* %ont*a%ts "!nds !t t!$e7%ons+$!n2 and e6'ens!e to a**an2e a ne# !ns+*an%e 'o-!%y "o*
ea%h %ons!2n$ent. One ans#e* to th!s '*o,-e$ !s the "-oat!n2 'o-!%y1 anothe* !s the o'en
%oe*.
Get3s -oo. "!*st at #hat the "-oat!n2 'o-!%y and o'en %oe* hae !n %o$$on. Both o""e* the
e6'o*te* !ns+*an%e %oe* on a-- sh!'$ents oe* a 'e*!od o" t!$e. In ,oth %ases a %e!-!n2 !s set
on the oe*a-- "!2+*e "o* e6a$'-e k1 $!--!on. As ea%h !nd!!d+a- sh!'$ent !s $ade1 the
e6'o*te* de%-a*es the a-+e o" the sh!'$ent1 and the %e!-!n2 !s a+to$at!%a--y *ed+%ed ,y that
a$o+nt. Th+s 1) sh!'$ents #o*th k1))1))) ea%h #o+-d *ed+%e a k1 $!--!on %oe* to Ee*o.
As ea%h sh!'$ent !s $ade1 !t !s %oe*ed ,y a Ce*t!"!%ate o" Ins+*an%e. O"ten the e6'o*te* has a
'ad o" these %e*t!"!%ates and s!$'-y "!--s o+t a ne# one "o* ea%h sh!'$ent.
7777777777777777777777777777777777777777777777777777777777777777777777777
0=
In so$e %o+nt*!es1 the 'o-!%y ,o+2ht ,y the e6'o*te* na$es the ,+ye* as the !ns+*ed 'a*ty.
08
J+d2$ent !n 3ilton, Hol;aie n o. v. Bel$ian ?rain an+ Pro+!ce o 61@0)) 0 /B -.8
Ins+*e*s hae a*!o+s #ays o" -!$!t!n2 %-a!$s +nde* s+%h %+$+-at!e a2*ee$ents. Aene*a--y
%-a!$s a*e .e't do#n ,yB
- A -!$!t 'e* ,otto$ M A 5,otto$? !s a sh!')m
- G!$!t 'e* -o%a-!ty. Mthe e6'ote*3s #a*eho+se !s a 5-o%a-!ty?. A #a*eho+se $ay %onta!n
see*a- %ons!2n$ents a#a!t!n2 sh!'$ent. I" they a*e a-- dest*oyed1 the -o%a-!ty -!$!t
#!-- '*o,a,-y ,!te).
Ins+*an%e %o$'an!es a-so 2ene*a--y add the Inst!t+te Ma!ntenan%e o" C-ass C-a+sesB th!s
*e>+!*es that a-- sh!'s +sed ,y the e6'o*te* a*e !n a %e*ta!n %-ass !n the sh!''!n2 *e2!ste*.
In te*$s o" the !ns+*an%e %oe* o""e*ed1 the "-oat!n2 'o-!%y and the o'en %oe* a*e1 !n e""e%t1
!dent!%a-. The -o2!st!%a- d!""e*en%es ,et#een the t#o .!nds o" %oe*1 ho#ee*1 hae -ed the
,+s!ness %o$$+n!ty today to '*e"e* the o'en %oe*. The "!*st adanta2e o" the "-oat!n2 'o-!%y
!s that !t !s set +' "o* a 'a*t!%+-a* t!$e and a+to$at!%a--y e6'!*es +n-ess *ene#edm the o'en
%oe* !s o'en7endedB !t does not e6'!*e1 a-tho+2h the*e a*e '*o!s!ons "o* %an%e--at!on on d+e
not!%e. Th+s the o'en %oe* !s $a*2!na--y $o*e %onen!ent. The se%ond d!""e*en%e !s $o*e
"+nda$enta-B an o'en %oe* !s not an !ns+*an%e 'o-!%y at a-- !t !s an a2*ee$ent ,y an
!ns+*an%e %o$'any to !ss+e an !ns+*an%e 'o-!%y !" the !ns+*ed as.s "o* one. No*$a--y the
!ns+*ed does not as. "o* a "+-- 'o-!%ym he s!$'-y %*eates a Ce*t!"!%ate o" Ins+*an%e #!th the
.no#-ed2e that !" he #ants a 'o-!%y he %an 2et one at any t!$e !n%-+d!n21 and th!s !s e*y
!$'o*tant1 a"te* a -oss. Th!s a**an2e$ent !s -ess "o*$a- and -ess t!$e7%ons+$!n2 ,+t
e6t*e$e-y *e-!a,-eB that !s !ts att*a%t!on "o* the e6'o*te*.
-$pes of Ins9rane +o#i$: >a#9e= an= 0n&a#9e=
When the e6'o*te* !ns+*es 2oods1 does he de%-a*e the!* a-+e to the !ns+*e* o* not& In
'*a%t!%e1 he $ay o* he $ay notB ,oth a-te*nat!es a*e 'oss!,-e. I" the a-+e !s not stated Mthe
!nval!e+ 'o-!%y)1 then the a-+e %an ,e esta,-!shed a"te* a -ossm nat+*a--y1 the e6'o*te* $+st
'*oe h!s "!2+*es '*e%!se-y. As -on2 as the "!2+*e does not e6%eed the tota- %oe* +nde* the
'o-!%y1 the !ns+*e* #!-- 'ay. The a-te*nat!e !s the val!e+ 'o-!%yB the e6'o*te* states the a-+e
o" the 2oods on the !ns+*an%e do%+$ent. Th!s has a de%!s!e adanta2eB the '*e7stated "!2+*e
%an !n%-+de not on-y the %ost o" the 2oods ,+t a-so the '*o"!t the e6'o*te* ho'ed to $a.e on
the$. ;o* th!s *eason1 a-+ed 'o-!%!es a*e $ost !n "ao* today.
The*e !s a '*o,-e$ he*e tho+2hB #hat ha''ens !" the e6'o*te* se*!o+s-y oe*a-+es the 2oods7
l$+st the !ns+*an%e %o$'any 'ay the de%-a*ed a-+e& The ans#e* !s KNo.K The e6'o*te*
$+st ,ehae #!th the !tmost $oo+ #ait* o* the 'o-!%y !s o!d. A %-ass!% %ase "*o$ 18=8B an
En2-!sh %o$'any sent 2oods to R+ss!a and a-+ed the$ at th*ee t!$es the!* %ost1 .no#!n2 that
the 2oods #o+-d se-- at a h+2e '*o"!t !n R+ss!a. The %o$'any sa!d noth!n2 to the !ns+*e*
a,o+t the #!de $a*2!n ,et#een %ost and stated a-+e. The 2oods #e*e -ost at sea. Was the
!ns+*an%e %o$'any o,-!2ed to 'ay& The %o+*t *+-ed that the e6'o*te* sho+-d hae d!s%-osed
the #!de $a*2!n to the !ns+*e*lthe e6'o*te* had not a%ted #!th the +t$ost 2ood "a!th and d!d
not *e%oe* +nde* the 'o-!%y.
0@
The -esson "o* the e6'o*te* !s %-ea*B the !ns+*e* $+st ,e to-d
ee*yth!n2 o" s'e%!a- s!2n!"!%an%e a,o+t ea%h sh!'$ent. The 'ena-ty "o* not d!s%-os!n2
!$'o*tant !n"o*$at!on !s no covera$e at all.
-$pes of Ins9rane +o#i$: -ime an= >o$age
Aoods %an ,e !ns+*ed ,et#een t#o dates a time 'o-!%y) o* ,et#een t#o '-a%es Ma voya$e
'o-!%y). Most e6'o*te*s '*e"e* the voya$e a''*oa%h. Ins+*e*s1 ho#ee*1 d!s-!.e !ns+*!n2 2oods
"o* an +n-!$!ted t!$e 'e*!odB a sh!'$ent !ntended to sta*t !n Jan+a*y and "!n!sh !n ;e,*+a*y
$!2ht d*a2 on +nt!- 9e%e$,e*. ;o* th!s *eason1 $ost 'o-!%!es a*e K$!6edKlthe 2oods a*e
!ns+*ed ,et#een t#o '-a%es ,+t on-y #!th!n a 2!en t!$e "*a$e. The t!$e "*a$e %an +s+a--y
,e e6tended1 ,+t on-y a2a!nst a h!2he* '*e$!+$.
7777777777777777777777777777777777777777777777777777777
0@
Ioni+es . Pen+er M18=8) GR @QB (41
2 Marine Ins9rane +o#i$: :.at Does It Co&erZ
Most $ode*n !ns+*an%e 'o-!%!es a*e ,ased on the G-oydHs Ma*!ne Po-!%y. Th!s do%+$ent !s
s!$'-y a s%hed+-e that -!stsB the 'o-!%y n+$,e*m the na$es o" the ass+*ed M!ns+*ed) and the
sh!'m the oya2e ando* 'e*!od o" !ns+*an%em the 2oods !ns+*ed Mand 'oss!,-y the!* a-+e)m the
s+$ !ns+*edm the '*e$!+$m s'e%!a- %ond!t!ons and #a**ant!esm and a list o# cla!ses to be
attac*e+. It !s th!s atta%hed -!st o" %-a+ses that s'e%!"!es the %oe* '*o!ded. O" 2*eatest
!$'o*tan%e a$on2 the K%-a+ses atta%hedK !s the Ca*2o C-a+se. It has th*ee e*s!onsB A1 B1 and
C.
Ca*2o C-a+se A #o*.s *ed+%t!e-y. It sta*ts #!th a 1))n %oe*lKa-- *!s.sKl,+t stead!-y
*ed+%es th!s %oe* ,y $eans o" a*!o+s e6%-+s!ons. Ca*2o C-a+ses B and C1 on the othe* hand1
#o*. %+$+-at!e-y. They sta*t #!th -!tt-e o* no %oe* and s'e%!"!%a--y add *!s.s that a*e
%oe*ed.
Wh!%hee* e*s!on !s %hosen1 the so7%a--ed Aene*a- E6%-+s!on C-a+se e6%-+des a n+$,e* o"
*!s.s1 !n 'a*t!%+-a*B
3ill#!l miscon+!ct o# t*e ass!re+. The *es+-ts o" any #*on2 a%t de-!,e*ate-y %a**!ed o+t ,y the
ass+*ed a*e not %oe*ed.
Or+inary lea4a$e, loss o# "ei$*t or normal "ear an+ tear. I" a o-at!-e o!- no*$a--y -oses
1)n o" !ts o-+$e !n a $onth1 th!s -ossland any s!$!-a*1 no*$a--y ant!%!'ated -ossl!s not
%oe*ed.
Improper pac4a$in$. 9a$a2e *es+-t!n2 "*o$ !$'*o'e* 'a%.!n2 o* '*e'a*at!on !s not %oe*ed.
To d!s%oe* #hat !s !$'*o'e*1 the %o+*ts +s+a--y *e"e* to #hat !s %+sto$a*y !n a 'a*t!%+-a*
t*ade.
In*erent vice in t*e $oo+s. So$e 2oods a*e !nhe*ent-y dan2e*o+s. A %a*2o o" hay1 "o*
e6a$'-e1 $ay %at%h "!*e ,e%a+se o" s'ontaneo+s %o$,+st!on. That !s an K!nhe*ent !%eK and
the -oss o" the hay !s not %oe*ed.
Delay. In 2ene*a-1 -osses %a+sed ,y de-ay a*e not %oe*ed.
Insolvency o# t*e o"ners 6etc.7 o# t*e vessel. I" a Co+*ney ends '*e$at+*e-y ,e%a+se the
sh!''!n2 -!ne 2oes ,an.*+'t1 e6t*a %osts M"+*the* sh!'$ent "o* e6a$'-e) a*e not %oe*ed.
cse o# N!clear 3eapons. I" %a*2o !s da$a2ed th*o+2h the +se o" n+%-ea* #ea'ons1 the
!ns+*ed #!-- '*o,a,-y ,e #o**y!n2 a,o+t $o*e than h!s %a*2o. Een so1 th!s *!s. to the 2oods
!s not %oe*ed.
In add!t!on1 a-- th*ee Ca*2o C-a+ses %onta!n the Unsea#o*th!ness and Un"!tness E6%-+s!on
C-a+se. Th!s %-a+se says that 2oods sh!''ed !n an +nsea#o*thy esse- a*e not !ns+*ed. S!n%e
"e# -ay$en %an .no# !" a sh!' !s sea#o*thy o* not1 the %-a+se !s so"tenedB %oe* !s #!thd*a#n
on-y !" the !ns+*ed 4ne" abo!t the +nsea#o*th!ness.
Gosses *es+-t!n2 "*o$ #a*1 "*o$ st*!.es o* "*o$ te**o*!s$ a*e a-so e6%-+ded1 ,+t he*e the
d!""e*en%e ,et#een a *ed+%t!e and a %+$+-at!e a''*oa%h !s !$'o*tant. I" the Wa* E6%-+s!on
C-a+se Mo* the St*!.e E6%-+s!on) %-a+se !s de-eted "*o$ Ca*2o C-a+se A1 then these *!s.s a*e
%oe*ed. ;o* Ca*2o C-a+ses B o* C !t !s ne%essa*y to add the so7%a--ed Instit!te 3ar la!ses
o* Instit!te ,tri4es la!ses to the 'o-!%y !" these *!s.s a*e to ,e %oe*ed. We sho+-d no# -oo.
at Ca*2o C-a+ses B and C to see #hat e6a%t-y they %oe*B
Ca*2o C-a+se B %oe*sB
1.1 Goss o" o* da$a2e to the s+,Ce%t7$atte* !ns+*ed att*!,+ta,-e toB
1.1.1 "!*e o* e6'-os!on1
1.1.0 esse- o* %*a"t ,e!n2 st*anded1 2*o+nd1 s+n. o* %a's!Eed1
1.1.4 oe*t+*n!n2 o* de*a!-$ent o" -and %oneyan%e1
1.1.8 %o--!s!on o* %onta%t o" esse- %*a"t o* %oneyan%e #!th any e6te*na- o,Ce%t othe* than
#ate*1
1.1.( d!s%ha*2e o" %a*2o at a 'o*t o" d!st*ess1
1.1.< ea*th>+a.e1 o-%an!% e*+'t!on o* -!2htn!n2.
1.0 Goss o" o* da$a2e to the s+,Ce%t7$atte* !ns+*ed %a+sed ,yB
1.0.1 2ene*a- ae*a2e sa%*!"!%e1
4)
1.0.0 Cett!son o* #ash!n2 oe*,oa*d.
77777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777
4)
Aene*a- ae*a2e sa%*!"!%e *e"e*s to a s!t+at!on !n #h!%h a sh!' $+st $a.e a Ksa%*!"!%eK Me.2.1
th*o#!n2 'a*t o" the %a*2o !n the sea) !n o*de* to '*ese*e the sh!' and the *est o" the %a*2o.
The %ost o" s+%h a sa%*!"!%e !s sha*ed ,y a-- the 'a*t!es !no-ed. MSee S%h$!--ho""1 '. (0).)
1.0.4 ent*y o" sea71 -a.e71 o* *!e*7#ate* !nto esse-1 %*a"t1 ho-d1 %oneyan%e1
%onta!ne*1 -!"tan o* '-a%e o" sto*a2e.
1.4 Tota- -oss o" any 'a%.a2e -ost oe*,oa*d o* d*o''ed #h!-st -oad!n2 on to1 o*
+n-oad!n2 "*o$1 a esse- o* %*a"t.
Cargo C#a9se C o&ers:
1.1 Goss o" o* da$a2e to the s+,Ce%t7$atte* !ns+*ed att*!,+ta,-e toB
1.1.1 "!*e o* e6'-os!on1
1.1.0 esse- o* %*a"t ,e!n2 st*anded1 2*o+nded1 s+n. o* %a's!Eed1
1.1.4 oe*t+*n!n2 o* de*a!-$ent o" -and %oneyan%e1
1.1.8 %o--!s!on o* %onta%t o" esse- %*a"t o* %oneyan%e #!th any e6te*na- o,Ce%t othe*
than #ate*1
1.1.( d!s%ha*2e o" %a*2o at a 'o*t o" d!st*ess1
1.0 Goss o" o* da$a2e to the s+,Ce%t7$atte* !ns+*ed %a+sed ,yB
1.0.1 2ene*a- ae*a2e sa%*!"!%e1
1.0.0 Cett!son.
Be-o# 'ay!n2 a %-a!$ "o* -oss1 !ns+*e*s st+dy the %!*%+$stan%es "+--y.
They e6a$!ne the !ns+*an%e do%+$ent to %he%. that the -ost o* da$a2ed 2oods #e*e %o**e%t-y
des%*!,ed. I" the des%*!'t!on and the 2oods a*e $ate*!a--y d!""e*ent1 the !ns+*e* $ay *e"+se to
'ay. In one "a$o+s %ase1 an e6'o*te* ,o+2ht -eathe* "-y!n2 Ca%.ets "*o$ the B*!t!sh
2oe*n$ent. The Ca%.ets #e*e t#enty yea*s o-d1 ,+t they had nee* ,een +sed. The e6'o*te*
des%*!,ed the 2oods as Kne# $enHs %-oth!n2 !n ,a-es.K When the 2oods #e*e sto-en1 the
!ns+*e* *e"+sed to 'ay ,e%a+se o" material mis+escription. The %o+*t a2*eedB the des%*!'t!on
#as !na%%+*ate.
41
In 2ene*a-1 the !ns+*ed $+st d!s%-ose any "a%t K#h!%h #o+-d !n"-+en%e the
C+d2$ent o" a '*+dent !ns+*e* !n "!6!n2 the '*e$!+$ o* a%%e't!n2 the *!s..K
40
So$e 'o-!%!es a--o# "o* !nno%ent $!sdes%*!'t!on #!th a Khe-d %oe*edK %-a+seB +nde* 2!en
%ond!t!ons1 the 2oods a*e he-d M %ons!de*ed) to ,e %oe*ed. An e6a$'-eB an e6'o*te* ,o+2ht
se%ond7hand $a%h!ne*y !n o*de* to e6'o*t !t. On the !ns+*an%e do%+$ent the 2oods #e*e
des%*!,ed s!$'-y as K$a%h!ne*y.K When the 2oods #e*e -ost1 the !ns+*e* *e"+sed to 'ay1
'-ead!n2 $ate*!a- $!sdes%*!'t!on. The 'o-!%y %onta!ned1 ho#ee*1 a Khe-d %oe*edK %-a+seB
9*el+ covere+ at premi!m to be arran$e+o. T*e %o+*t o*de*ed the !ns+*an%e %o$'any to 'ay1
,+t a--o#ed !t an e6t*a '*e$!+$.
44
In s+$$a*y1 a-#ays *e$e$,e* the %a*d!na- '*!n%!'a- o" !ns+*an%eB
A %ont*a%t o" $a*!ne !ns+*an%e !s a %ont*a%t ,ased +'on the +t$ost 2ood "a!th1 and1 !"
the +t$ost 2ood "a!th ,e not o,se*ed ,y e!the* 'a*ty1 the %ont*a%t $ay ,e ao!ded ,y
the othe* 'a*ty.
48
mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm
41
(n$lom(#rican Merc*ants v. Bay ley M1@=)) 1 QB 4111 41@740).
40
S%h$!+ho""1 '. ()4.
44
?reenoc4 ,,. o. . Maritime Ins!rance o. M1@)4) 1 /B. 4<=.
48
Marine Ins!rance (ct. MU/) 1@)=1 I 1=.

CA;E ;T9$G
TAHE :VER
Pa%!"!% E6'o*ts !s a ne# %o$'any "o+nded !n De*,ena to e6'o*t te6t!-es. The %o$'any ant!%!'ates
sa-es o" a,o+t k())1))) d+*!n2 !ts "!*st yea* o" o'e*at!ons1 #!th $ost o*de*s ,et#een k11))) and
k4)1))). S!n%e De*,ena !s an !s-and1 %ons!2n$ents o" 2oods a-#ays t*ae- ,y sh!'. The %o$'any
#ants ad!%e on the ,est .!nd o" !ns+*an%e "o* !ts CI; %ont*a%ts. What #o+-d yo+ *e%o$$end a$on2
the %ho!%es ,e-o#& In ea%h %ase ,e *eady to 2!e yo+* *easons.
1. Ta!-o*7$ade 'o-!%!es ;-oat!n2 'o-!%y O'en %oe*
...Be%a+se the*e !s no need "o* a "+-- !ns+*an%e 'o-!%y to ,e ne2ot!ated "o* ea%h o*de*.
0. Da-+ed 'o-!%y Una-+ed 'o-!%y
...Be%a+se th!s a--o#s %-a!$s "o* the -oss o" e6'e%ted '*o"!t !" the 2oods a*e dest*oyed o* da$a2ed.
4. Doya2e 'o-!%y T!$e 'o-!%y T!$e and oya2e 'o-!%y
...Be%a+se th!s 'o-!%y $a!nta!ns !ns+*an%e %oe* on the 2oods een !" the*e !s a de-ay.
8. Ca*2o C-a+se A MA-- *!s.s) Ca*2o C-a+se B Ca*2o C-a+se C
9e,ata,-e. Be%a+se "o* the e6'o*te*1 Ca*2o C-a+se C !s %hea'est. ;+*the*$o*e1 noth!n2 $o*e !s
*e>+!*ed +nde* CI; %ont*a%ts. Ho#ee*1 the ,+ye* $ay ,e e*y +nha''y !" the te6tt!-es a*e -ost and
the !ns+*an%e a**an2ed ,y the e6'o*te* "a!-s to o""e* the e6'e%ted %o$'ensat!on. The e6'o*te* and the
,+ye* sho+-d d!s%+ss th!s !ss+e.
(. Inst!t+te Wa* C-a+ses :ES NO de'ends on
9e'ends on *o+te and 'o-!t!%a- s!t+at!on.
<. Inst!t+te St*!.es C-a+ses :ES NO de'ends on
9e'ends on so%!a- and 'o-!t!%a- s!t+at!on. No*$a--y %oe* a2a!nst st*!.es !s *e%o$$ended.
3! TERMS OF TRADE/ INCOTERMS
-5E +R34LEM
A-tho+2h the '+*'ose o" ICC In%ote*$s !s to
standa*d!Ee te*$s o" t*ade #o*-d#!de1 $any
,+s!ness 'eo'-e do not .no# #hat these
te*$s $ean o* the nat+*e o" the!* *!2hts and
d+t!es +nde* an In%ote*$ %ont*a%t.
CC DN Mz% d $r% Sj%h %wa ICC
In%ote*$s -Q SV t!N+ %h+gn h_a %R% S!v+ .hoXn
thT}n2 $s! t*Nn toQn thc 2!d!1 nh!v+ doanh nhn
.hpn2 ,!ct nhqn2 S!v+ .hoXn nQy %_ n2ha -Q tjnh
%hft %wa %R% >+yvn Q n2ha r %wa $[nh theo
$Pt hU' S]n2 In%ote*$.
THE PRINCIPGE
The ICC '+,-!%at!on1 In%ote*$s 1@@)1 2!es
"+-- and %-ea* !n"o*$at!on a,o+t the *!2hts
and d+t!es o" ,+ye* and e6'o*te* !n In%ote*$
%ont*a%ts. I2no*an%e o" these te*$s %an ,e
e6'ens!e.
NAU:N TC fn 'hg$ ICC1 In%ote*$s 1@@)1
%+n2 %f' thpn2 t!n S|y Sw Q * *Qn2 v >+yvn Q
n2ha r %wa n2Tu! $+a Q 6+ft .hg+ t*on2 hU'
S]n2 In%ote*$. /hpn2 ,!ct %R% S!v+ .hoXn nQy
%_ thV tn .{$.
IN MORE 9EPTH
Wo*-d t*ade de'ends to an !n%*eas!n2 e6tent o"
standa*d!Eat!onB !nte*nat!ona- #e!2hts and
$eas+*es a*e $et*!%B $any %ont*a%ts a*e '*!%ed !n
U.S. do--a*sm -ette* o" %*ed!t "o--o# standa*d
*+-es. M!s+nde*stand!n2s %an ,e e6'ens!eB
anyth!n2 that $a.es the$ -!.e-y -ess -!.e-y !s
#e-%o$e.
S+ h}n v
ThT}n2 $s! thc 2!d! 'hr th+P% Qo $Pt $x% SP
n2Qy %Qn2 tn2 %wa t!N+ %h+gnB t*~n2 -TUn2 >+%
tc Q %R% ,!`n 'hR' STU% s -!`+B nh!v+ hU' S]n2
%_ 2!R ,hn2 Sp -a M1 thT tjn drn2 theo >+y tO%
t!N+ %h+gn. Sa h!V+ -|$ %_ thV tn .{$B ,ft %x
S!v+ 2[ $Q -Q$ %ho h~ %_ thV jt %_ .hX nn2 STU%
%hQo S_n. In%ote*$s MTu! ,a MPt n2+]n t!n 2y
nh|$ -tn >+% tc -Q S!v+ .!`n 2!ao hQn2. Chin2
-.e -.irteen Inoterms
One so+*%e o" !nte*nat!ona- %on"+s!on a*e
de-!e*y %ond!t!ons. We hae a-*eady -oo.ed at a
n+$,e* o" '*o,-e$s and seen ho# nat!ona- -a#s
a*y !n the!* '*e"e**ed so-+t!ons. To %-a*!"y the
s!t+at!on1 the Inte*nat!ona- Cha$,e* o"
Co$$e*%e MICC) !ss+ed as ea*-y as 1@4<
standa*d!Eed te*$s7 the so7%a--ed Inte*nat!ona-
Co$$e*%!a- Te*$s o* In%ote*$s. Oe* the yea*s1
the ICC has +'dated the In%ote*$s as the nat+*e
o" %o$$e*%e has %han2ed7 !n%*eased +se o"
a!*%*a"t1 the !nt*od+%t!on o" %onta!ne*s1 e-e%t*on!%
do%+$ent t*ans"e* and so on.7 a-- hae *e>+!*ed
ne# o* *e!sed te*$s. The -atest !ss+e o"
In%'te*$s !s the 0)1) *e!s!on.
tp! S 6e$ 6{t $Pt s fn Sv Q nh[n thfy nhT
thc nQo -+Zt 'hR' >+% 2!a .hR% nha+ t*on2 %R%
2!X! 'hR' Ta thj%h %wa h~. V -Q$ * t[nh h[nh1
Phn2 ThT}n2 $s! >+% tc MICC) ,an hQnh sd$
nhft -Q 1@4< v t!N+ %h+gn h_a %R! 2~! -Q thT}n2
$s! >+% tc S!v+ .hoXn nQy hoz% In%ote*$s.
T*on2 nhqn2 n$ >+a1 ICC S %Z' nhZt
In%ote*$s nhT ,Xn %hft %wa thT}n2 $s! S thay
S! tn2 s drn2 tQ+ ,ay1 !`% 2!d! th!`+ %R%
thn2 %hxa1 %h+yVn 2!ao tQ! -!`+ S!`n t Q .
Tft %X Sv+ %_ yN+ %|+ $d! hoz% STU% sa S!1 ,
s+n2 %R% S!v+ .hoXn. CR% fn Sv $d! nhft %wa
In%'te*$s -Q ,Xn sa S! 0)1).
In esta,-!sh!n2 the 14 In%ote*$s1 the ICC has
-oo.ed at the $ost %o$$on a*!at!ons !n an
a**an2e$ent "o* de-!e*y and esta,-!shed "o*
ea%h a*!at!on the e6a%t d+t!es o" the e6'o*te*
and the ,+ye*. In sett!n2 +' the 14 te*$s1 the
ICC has ta.en !nto a%%o+nt th*ee a*!a,-esB
- Whe*e a-on2 the t*ans'o*tat!on *o+te
de-!e*y ta.es '-a%em
- What $eans o" t*ans'o*t !s +sedm and
- What %osts the e6'o*te* $!2ht 'ay a"te*
the 'o!nt o" de-!e*y.

The 14 te*$s a*e 2*o+'ed !n "o+* %ate2o*!esB
E7te*$s1 ;7te*$s1 C7te*$s and 97te*$s. The
E7te*$ dea-s #!th de-!e*!es at the e6'o*te*3s
"a%to*y. The ;7te*$s a-- %on%e*n de-!e*y
#!th!n the e6'o*te*3s %o+nt*y. The C7te*$s
!no-e de-!e*y !n the e6'o*te*3s %o+nt*y1
#!th e6t*a %osts "o* the e6'o*te* a"te*
de-!e*y. 97te*$s ta.e %a*e o" de-!e*y
o+ts!de the e6'o*te*3s %o+nt*y. A ta,-e 2!es
+s an oe*!e#B
QUESTIONB E6'-a!n EW1 C;R1 99U
EW !s one o" the E7te*$s !n the In%ote*$s.
It stands "o* E67#o*.1 a $ethod o" de-!e*y1
#he*e the e6'o*te* !s "*ee "*o$ %ha*2e #hen
e6'o*te* not!"!es ,+ye* o" aa!-a,!-!ty o"
2oods at e6'o*te*3s '*e$!ses M"a%to*y o*
#a*eho+se). Then the e6'o*te* !s not
*es'ons!,-e "o* t*ans'o*t o* any othe* %osts.
C;R !s one o" the C7te*$s !n the In%ote*$s. It
stands "o* Cost and ;*e!2ht1 a $ethod o" de-!e*y1
#he*e the e6'o*te* !s "*ee "*o$ %ha*2e #hen the
2oods 'ass the sh!'3s *a!-. Then the e6'o*te* !s
*es'ons!,-e "o* sh!' t*ans'o*t and "*e!2ht.
ThQnh -Z' 14 In%ote*$s1 ICC S 6e$ 6{t %R% ,!cn
thV 'h ,!cn nhft t*on2 $Pt sa sO' 6c' 2!ao hQn2
Q th!ct -Z' %ho $! ,!cn thV %R% nh!`$ r %hjnh
6R% nhqn2 nTd% 6+ft .hg+ Q n2Tu! $+a. T*on2
!`% th!ct -Z' t*on2 14 th+Zt n2q1 ICC S STa Qo
tQ! .hoXn ,a ,!cnB 7 d~% theo t+ycn STun2 Zn
%h+yVn 2!ao hQn2 d!n *a 7 'hT}n2 t!`n Zn tX!
STU% s drn2m Q %h! 'hj 6+ft .hg+ %_ thV t*X t!vn
sa+ .h! %R% S!V$ 2!ao hQn2. 14 th+Zt n2q STU%
nh_$ -s! thQnh ,n -os!B %R% S!v+ .!`n S!`n t1
%R% S!v+ .!`n nh_$ ;1 C S!v+ .!`n Q S!v+ .!`n
9. CR% 2!ao d\%h E7dQ! d! !`% 2!ao hQn2 ts! nhQ
$Ry 6+ft .hg+. ;7v tft %X %R% $! >+an t$
'hn 'h! t*on2 nTd% 6+ft .hg+. C7th+Zt n2q -!Nn
>+an Scn 'hn 'h! t*on2 nTd% 6+ft .hg+1 d!
%h! 'hj thN$ %ho %R% nhQ 6+ft .hg+ sa+ .h! 2!ao
hQn2. 9 S!v+ .!`n %h$ s_% %+n2 %f' ,Nn n2oQ!
nTd% 6+ft .hg+. MPt ,Xn2 %ho %hin2 ta $Pt %R!
nh[n tn2 >+anB CU H-IB A!X! thj%h EW1
C;R1 99U EW -Q $Pt t*on2 %R% S!v+ .hoXn E
t*on2 In%ote*$s. N_ -Q !ct tOt %wa E6 %pn2 !`%1
$Pt 'hT}n2 'hR' 2!ao hQn21 6+ft .hg+ -Q $!n
'hj ty 'hj .h! 6+ft .hg+ thpn2 ,Ro %ho n2Tu!
$+a sn %_ %wa hQn2 hoR ts! %} s^ 6+ft .hg+ MnhQ
$Ry hoz% .ho). Sa+ S_1 6+ft .hg+ .hpn2 %h\+
t*R%h nh!`$ Zn %h+yVn1 hoz% ,ft . %R% %h! 'hj
.hR%.
C;R -Q $Pt t*on2 nhqn2 C7S!v+ .hoXn t*on2
In%ote*$s. N_ -Q !ct tOt %wa Ch! 'hj Zn tX!1 $Pt
'hT}n2 'hR' 2!ao hQn21 6+ft .hg+ STU% $!n 'hj
.h! hQn2 h_a TUt >+a -an %an tQ+. Sa+ S_1 6+ft
.hg+ %h\+ t*R%h nh!`$ S! d! tQ+ Zn tX! Q Zn
%h+yVn hQn2 h_a.
-5E +R34LEM
A-tho+2h the '+*'ose o" ICC In%ote*$s !s to standa*d!Ee te*$s o" t*ade #o*-d#!de1 $any
,+s!ness 'eo'-e do not .no# #hat these te*$s $ean o* the nat+*e o" the!* *!2hts and d+t!es +nde*
an In%ote*$ %ont*a%t.
THE PRINCIPGE
The ICC '+,-!%at!on1 In%ote*$s 1@@)1 2!es "+-- and %-ea* !n"o*$at!on a,o+t the *!2hts and d+t!es
o" ,+ye* and e6'o*te* !n In%ote*$ %ont*a%ts. I2no*an%e o" these te*$s %an ,e e6'ens!e.
IN MORE 9EPTH
Wo*-d t*ade de'ends to an !n%*eas!n2 e6tent o" standa*d!Eat!onB !nte*nat!ona- #e!2hts and
$eas+*es a*e $et*!%B $any %ont*a%ts a*e '*!%ed !n U.S. do--a*sm -ette* o" %*ed!t "o--o# standa*d
*+-es. M!s+nde*stand!n2s %an ,e e6'ens!eB anyth!n2 that $a.es the$ -!.e-y -ess -!.e-y !s
#e-%o$e.
-.e -.irteen Inoterms
One so+*%e o" !nte*nat!ona- %on"+s!on a*e de-!e*y %ond!t!ons. We hae a-*eady -oo.ed at a
n+$,e* o" '*o,-e$s and seen ho# nat!ona- -a#s a*y !n the!* '*e"e**ed so-+t!ons. To %-a*!"y the
s!t+at!on1 the Inte*nat!ona- Cha$,e* o" Co$$e*%e MICC) !ss+ed as ea*-y as 1@4< standa*d!Eed
te*$s7 the so7%a--ed Inte*nat!ona- Co$$e*%!a- Te*$s o* In%ote*$s. Oe* the yea*s1 the ICC has
+'dated the In%ote*$s as the nat+*e o" %o$$e*%e has %han2ed7 !n%*eased +se o" a!*%*a"t1 the
!nt*od+%t!on o" %onta!ne*s1 e-e%t*on!% do%+$ent t*ans"e* and so on.7 a-- hae *e>+!*ed ne# o*
*e!sed te*$s. The -atest !ss+e o" In%'te*$s !s the 0)1) *e!s!on.
In esta,-!sh!n2 the 14 In%ote*$s1 the ICC has -oo.ed at the $ost %o$$on a*!at!ons !n an
a**an2e$ent "o* de-!e*y and esta,-!shed "o* ea%h a*!at!on the e6a%t d+t!es o" the e6'o*te* and
the ,+ye*. In sett!n2 +' the 14 te*$s1 the ICC has ta.en !nto a%%o+nt th*ee a*!a,-esB
- Whe*e a-on2 the t*ans'o*tat!on *o+te de-!e*y ta.es '-a%em
- What $eans o" t*ans'o*t !s +sedm and
- What %osts the e6'o*te* $!2ht 'ay a"te* the 'o!nt o" de-!e*y.

The 14 te*$s a*e 2*o+'ed !n "o+* %ate2o*!esB E7te*$s1 ;7te*$s1 C7te*$s and 97te*$s. The E7te*$
dea-s #!th de-!e*!es at the e6'o*te*3s "a%to*y. The ;7te*$s a-- %on%e*n de-!e*y #!th!n the
e6'o*te*3s %o+nt*y. The C7te*$s !no-e de-!e*y !n the e6'o*te*3s %o+nt*y1 #!th e6t*a %osts "o*
the e6'o*te* a"te* de-!e*y. 97te*$s ta.e %a*e o" de-!e*y o+ts!de the e6'o*te*3s %o+nt*y. A ta,-e
2!es +s an oe*!e#B
QUESTIONB E6'-a!n EW1 C;R1 99U
EW !s one o" the E7te*$s !n the In%ote*$s. It stands "o* E67#o*.1 a $ethod o" de-!e*y1 #he*e
the e6'o*te* !s "*ee "*o$ %ha*2e #hen e6'o*te* not!"!es ,+ye* o" aa!-a,!-!ty o" 2oods at
e6'o*te*3s '*e$!ses M"a%to*y o* #a*eho+se). Then the e6'o*te* !s not *es'ons!,-e "o* t*ans'o*t o*
any othe* %osts.
C;R !s one o" the C7te*$s !n the In%ote*$s. It stands "o* Cost and ;*e!2ht1 a $ethod o" de-!e*y1
#he*e the e6'o*te* !s "*ee "*o$ %ha*2e #hen the 2oods 'ass the sh!'3s *a!-. Then the e6'o*te* !s
*es'ons!,-e "o* sh!' t*ans'o*t and "*e!2ht.
TERM
T:PE
SHORT
;ORM
;UGG
;ORM
POINT O; 9EGIDER: TRANSPO
RT
COST
A;TER
9EGIDER:
E7
TERMS
EW E67#o*. When e6'o*te* not!"!es ,+ye* o"
aa!-a,!-!ty o" 2oods at
e6'o*te*3s '*e$!ses1 he !s "*ee
"*o$ *es'ons!,!-!ty
None None
;7TERMS ;CA ;*ee Ca**!e* When 2oods a*e handed oe* to
the %a**!e*
Any None
;AS ;*ee
A-on2s!7de
Sh!'
When 2oods a*e a-on2s!de the
sh!'1 *eady "o* -oad!n2
Sh!' None
;OB ;*ee On
Boa*d
When the 2oods 'ass the sh!'3s
*a!- at the 'o*t o" -oad!n2
Sh!' None
C7
TERMS
C;R Cost and
;*e!2ht
When the 2oods 'ass the sh!'3s
*a!- at the dest!nat!on
Sh!' ;*e!2ht to
dest!nat!on
CI; Cost1
Ins+*an%e
and ;*e!2ht
When the 2oods 'ass the sh!'3s
*a!-
Sh!' ;*e!2ht and
Ins+*an%e to
dest!nat!on
CPT Ca**!a2e
Pa!d To
When the 2oods a*e handed oe*
to the %a**!e*
Any ;*e!2ht to
dest!nat!on
CIP Ca**!a2e When the 2oods a*e handed oe* Any ;*e!2ht and
and
Ins+*an%e
Pa!d
to the %a**!e* !ns+*an%e to
dest!nat!on
97
TERMS
9A; 9e-!e*ed
At ;*ont!e*
When the 2oods a*e %-ea*ed "o*
e6'o*t at a na$ed "*ont!e*
Any None
9ES 9e-!e*ed
E67Sh!'
When the sh!' %a**y!n2 the
2oods a**!es at the 'o*t o"
dest!nat!on
Sh!' None
9EQ 9e-!e*ed
E67Q+ay
When the 2oods a*e on the >+ay
at the 'o*t o" dest!nat!on1 and
%-ea*ed "o* !$'o*t
Sh!' None
99U 9e-!e*ed
9+ty
Un'a!d
When the 2oods a*e aa!-a,-e to
the ,+ye* at a na$ed dest!nat!on1
d+ty +n'a!d
Any None
99P 9e-!e*ed
9+ty Pa!d
When the 2oods a*e aa!-a,-e to
the ,+ye* at a na$ed dest!nat!on1
d+ty 'a!d
Any None
In%ote*$s o,!o+s-y sae a 2*eat dea- o" #o*. !n
%ont*a%t d*a"t!n2. Co$'a*e the t#o e*s!ons o"
the de-!e*y %-a+se ,e-o#B
The e>+!'$ent -!sted !n Anne6 1 sha-- ,e
de-!e*ed ;OB MBe!*a) MIn%ote*$s 1@@)).
;o* the e>+!'$ent -!sted !n Anne6 1 the '*!%e !s
"o* de-!e*y "*ee on ,oa*d the %a**y!n2 esse-
des!2nated ,y the B+ye* at the 'o*t o" Be!*a
!n%-+d!n2 the %ost o" 'a%.!n21 as #e-- as
e6'enses !n%+**ed ,e"o*e -oad!n2 the e>+!'$ent
on ,oa*d the %a**y!n2 esse-.
The "!*st #o*d!n2l+s!n2 an In%ote***tl!s $o*e
than s!$'-e sho*thandB !t !n%o*'o*ates s!6 'a2es
o" the ICC ,oo.-et Incoterms 1//8 s'e%!"y!n2
n+$e*o+s d+t!es o" ,oth ,+ye* and e6'o*te*. The
e6'o*te*1 "o* e6a$'-e1 $+st K9e-!e* the 2oods
on ,oa*d the esse- na$ed ,y the ,+ye*...K and
H'ay a-- %osts *e-at!n2 to the 2oods +nt!- s+%h t!$e
as they hae 'assed the sh!'Hs *a!-.K
4<
A #o*d o" %a+t!on on In%ote*$sB the 1@@)
In%ote*$s a*e *ad!%a--y ne#. So$e o-d te*$s
hae d!sa''ea*edB ;OT and ;OR M;*ee On T*+%.
and ;*ee on Ra!-) hae ,een *e'-a%ed ,y ;CAm
CL; has ,een *ena$ed C;R. ;+*the*1 so$e
t*ad!t!ona- te*$s no# hae e*y *est*!%ted
$ean!n2sB ;OB1 "o* e6a$'-e1 a''-!es only to
transport by s*ipp "o* othe* $eans o" t*ans'o*t1
the %o**e%t K;OB e>+!a-entK !s no# ;CA. A-so
*e$e$,e* that In%ote*$s a''-y on-y to
!nte*nat!ona- t*adem "o* t*ade "it*in a %o+nt*y1
In%ote*$s a*e not a''*o'*!ate.
T#o >+est!ons o"ten a*!se a,o+t In%ote*$sB "!*st1
!s !t ne%essa*y to state !n the %ont*a%t that ;OB1
CI;1 and so on a*e In%ote*$s& And se%ond-y1
#hat ha''ens !" the Ks$a-- '*!ntK o" Incoterms
1//8 %on"-!%ts #!th a '*o!s!on o" the %ont*a%t&
GetHs -oo. at these !ss+es.
In%ote*$s * *Qn2 -Q t!ct .!`$ *ft nh!v+ %pn2 !`%
sosn thXo hU' S]n2. So sRnh ha! 'h!Nn ,Xn %wa
%R% S!v+ .hoXn 2!ao hQn2 dTd! SyB CR% th!ct ,\
STU% -!`t .N t*on2 Phr -r% 1 STU% 2!ao ;OB
MBe!*a) MIn%ote*$s 1@@)). ! d! %R% th!ct ,\
STU% -!`t .N t*on2 Phr -r% 11 2!R 2!ao hQn2 $!n
'hj t*Nn tQ+ tha% h!`n theo %h S\nh %wa n2Tu!
$+a ts! %Xn2 Be!*a ,ao 2]$ %X %h! 'hj S_n2 2_!1
%n2 nhT %h! 'hj 'hRt s!nh t*Td% .h! tX! %R% t*an2
th!ct ,\ t*Nn tQ+ tha% h!`n.
In%ote*$s o,!o+s-y sae a 2*eat dea- o" #o*. !n %ont*a%t d*a"t!n2. Co$'a*e the t#o e*s!ons o" the
de-!e*y %-a+se ,e-o#B
The e>+!'$ent -!sted !n Anne6 1 sha-- ,e de-!e*ed ;OB MBe!*a) MIn%ote*$s 1@@)).
;o* the e>+!'$ent -!sted !n Anne6 1 the '*!%e !s "o* de-!e*y "*ee on ,oa*d the %a**y!n2 esse-
des!2nated ,y the B+ye* at the 'o*t o" Be!*a !n%-+d!n2 the %ost o" 'a%.!n21 as #e-- as e6'enses
!n%+**ed ,e"o*e -oad!n2 the e>+!'$ent on ,oa*d the %a**y!n2 esse-.
The "!*st #o*d!n2l+s!n2 an In%ote***tl!s $o*e than s!$'-e sho*thandB !t !n%o*'o*ates s!6 'a2es o"
the ICC ,oo.-et Incoterms 1//8 s'e%!"y!n2 n+$e*o+s d+t!es o" ,oth ,+ye* and e6'o*te*. The
e6'o*te*1 "o* e6a$'-e1 $+st K9e-!e* the 2oods on ,oa*d the esse- na$ed ,y the ,+ye*...K and H'ay
a-- %osts *e-at!n2 to the 2oods +nt!- s+%h t!$e as they hae 'assed the sh!'Hs *a!-.K
4<
A #o*d o" %a+t!on on In%ote*$sB the 1@@) In%ote*$s a*e *ad!%a--y ne#. So$e o-d te*$s hae
d!sa''ea*edB ;OT and ;OR M;*ee On T*+%. and ;*ee on Ra!-) hae ,een *e'-a%ed ,y ;CAm CL; has
,een *ena$ed C;R. ;+*the*1 so$e t*ad!t!ona- te*$s no# hae e*y *est*!%ted $ean!n2sB ;OB1 "o*
e6a$'-e1 a''-!es only to transport by s*ipp "o* othe* $eans o" t*ans'o*t1 the %o**e%t K;OB
e>+!a-entK !s no# ;CA. A-so *e$e$,e* that In%ote*$s a''-y on-y to !nte*nat!ona- t*adem "o* t*ade
"it*in a %o+nt*y1 In%ote*$s a*e not a''*o'*!ate.
T#o >+est!ons o"ten a*!se a,o+t In%ote*$sB "!*st1 !s !t ne%essa*y to state !n the %ont*a%t that ;OB1 CI;1
and so on a*e In%ote*$s& And se%ond-y1 #hat ha''ens !" the Ks$a-- '*!ntK o" Incoterms 1//8 %on"-!%ts
#!th a '*o!s!on o" the %ont*a%t& GetHs -oo. at these !ss+es.
S'e%!"y!n2 In%ote*$s
Is the s'e%!"!%at!on1 KIn%ote*$s 1@@)1K *ea--y needed& In "a%t1 !t !s ne%essa*y ,e%a+se ;OB and CI;
a*e a-so %o$$on te*$s !n $any %o+nt*!es #!th d!""e*ent %o$$e*%!a- t*ad!t!ons1 "o* e6a$'-e !n the
Un!ted States.
4=
Un"o*t+nate-y1 A$e*!%an and ICC +sa2e o" the te*$s +o not a$ree- "o* e6a$'-e !n the
U.S.B
The te*$ ;OB o* K"*ee on ,oa*d1K $ay ,e +sed #!th *e"e*en%e to the se--e*Hs %!ty1 the ,+ye*Hs %!ty1 o*
an !nte*$ed!ate %!ty. It $ay a-so ,e +sed #!th *e"e*en%e to a na$ed %a**!e*1 esse-1 %a* o* othe*
eh!%-e.
48
mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm
4<
Incoterms ''. 148718).
4=
See UCC I0740) to 400. The UCC !s the Un!"o*$ Co$$e*%!a- Code o" the Un!ted S-ates. It #!-- ,e
*e"e**ed to $any t!$es !n the "o--o#!n2 'a2es. ;o* $o*e !n"o*$at!on on the Code1 see Cha'te* 8.
Se%t!on 0.
48
Ande*son1 '. 48@.
;URTHER REA9INA
INC3-ERM1 %@1@
The ne# INCOTERMS 0)1) ,e%a$e e""e%t!e
Jan+a*y 11 0)11.
In%ote*$s77#h!%h !s an a,,*e!at!on "o*
Inte*nat!ona- Co$$e*%!a- te*$s77a*e a se*!es o"
sa-es te*$s.
They a*e '+,-!shed ,y the Inte*nat!ona- Cha$,e*
o" Co$$e*%e MICC) and a*e #!de-y +sed !n
%o$$e*%!a- t*ansa%t!ons.
In add!t!on to '*o!d!n2 a set o" *+-es "o* the
!nte*'*etat!on o" %o$$on-y +sed t*ade te*$s1
INCOTERMS 0)1) a%%o$'-!sh the "o--o#!n2B
Ma) s!2n!"!%ant-y *e!ses A*o+' 9 -!sted !n
INCOTERMS 0)))m
M,) *ed+%e In%ote*$s "*o$ "o+* 2*o+'s to t#o
2*o+'s1 a--o#!n2 t*ade e6'e*ts to %hoose the $ost
INCOTERMS 0)1)
INCOTERMS 0)1) %_ h!`+ -a% ty n2Qy 1 717
0)11.
In%ote*$s 7 S_ -Q $Pt ty !ct tOt d! %R% S!v+
.!`n thT}n2 $s! >+% tc 7 -Q $Pt -ost %R% S!v+
.hoXn ,Rn hQn2.
In%ote*$s STU% %pn2 , ,^! Phn2 ThT}n2 $s!
>+% tc MICC) Q STU% s drn2 *Pn2 *! t*on2
%R% 2!ao d\%h thT}n2 $s!.
N2oQ! !`% %+n2 %f' $Pt ,P >+y tO% SV 2!X! thj%h
%R% S!v+ .!`n 2!ao hQn2 thTun2 STU% s drn21
INCOTERMS 0)1) hoQn thQnh sa+ SyB
Ma) S!v+ %hnh -s! ,Xn2 9 hU' -e h}n so d!
INCOTERMS 0)))1
M,) 2!X$ In%ote*$s ty ,n nh_$ %n ha! nh_$1
%ho 'h{' thT}n2 $s! %R% %R% nhQ 6+ft nhZ' .hg+
SV -aa %h~n %R% >+y tO% thj%h hU' nhft -!Nn >+an
Scn 'hT}n2 thx% Zn tX!m Q
s+!ta,-e *+-e *e-ated to the $ode o" t*ans'o*tm and
M%) *ed+%e the a,so-+te n+$,e* o" In%ote*$s "*o$
14 to 11.
Mo*eoe*1 INCOTERMS 0)1) o""e* add!t!ona-
2+!dan%e #h!%h ass!sts +se*s !n se-e%t!n2 the $ost
a''*o'*!ate In%ote*$ "o* ea%h t*ansa%t!on.
The *e!sed te*$s a-so s'e-- o+t *+-es *e2a*d!n2
the +se o" e-e%t*on!% '*o%ed+*esm deta!-
!n"o*$at!on on se%+*!ty7*e-ated %-ea*an%es "o*
sh!'$entsm and o""e* ad!%e #!th *es'e%t to
do$est!% t*ade.
M%) -Q$ 2!X$ s -TUn2 %wa In%ote*$s ty 14
6+n2 %n 11 S!v+ .hoXn.
H}n nqa1 INCOTERMS 0)1) %+n2 %f' hTdn2
dtn , s+n2 nQy sW h t*U n2Tu! dn2 t*on2 !`%
-aa %h~n %R% In%ote*$ thj%h hU' nhft %ho $!
2!ao d\%h. CR% S!v+ .hoXn sa S! %n2 2!X!
thj%h * *Qn2 %R% >+y tO% -!Nn >+an Scn !`% s
drn2 %R% thw tr% S!`n t1 thpn2 t!n %h! t!ct -!Nn
>+an Scn an n!nh thpn2 >+an %ho %R% -p hQn2 Q
%+n2 %f' -u! .h+yNn S! d! thT}n2 $s! t*on2
nTd%.
:.at are InotermsZ
In%ote*$s o* Inte*nat!ona- Co$$e*%!a- te*$s a*e
a se*!es o" sa-es te*$s. They a*e '+,-!shed ,y the
Inte*nat!ona- Cha$,e* o" Co$$e*%e MICC) and
a*e #!de-y +sed !n !nte*nat!ona- %o$$e*%!a-
t*ansa%t!ons. The '+*'ose o" In%ote*$s !s to
'*o!de a set o" !nte*nat!ona- *+-es "o* the
!nte*'*etat!on o" %o$$on-y +sed t*ade te*$s !n
!nte*nat!ona- t*ansa%t!ons. They %-ose-y
%o**es'ond to the U.N. Conent!on on Cont*a%ts
"o* the Inte*nat!ona- Sa-e o" Aoods. The "!*st
In%ote*$s #e*e !ss+ed !n 1@4<. The $ost *e%ent
In%ote*$s #e*e +'dated !n 0)1) and ,e%a$e
e""e%t!e Jan+a*y 11 0)11.
:.o nee=s to 9n=erstan= InotermsZ
Aoe*n$ent t*ade o""!%!a-s as #e-- as $any
'*!ate se%to* 'a*t!es sho+-d +nde*stand
In%ote*$s. S+%h '*!ate se%to* 'a*t!es !n%-+deB
e6'o*te*s1 !$'o*te*s1 t*ade "!nan%e '*o"ess!ona-s1
e6'o*t %o$'-!an%e s'e%!a-!sts1 %+sto$s ,*o.e*s1
"*e!2ht "o*#a*de*s1 !ns+*e*s1 !nte*nat!ona- %*ed!t
'*o"ess!ona-s1 and sa-es and '+*%has!n2
$ana2e*s.
In%ote*$s -Q 2[& In%ote*$s hoz% %R% S!v+ .hoXn
thT}n2 $s! >+% tc -Q $Pt -ost %R% S!v+ .hoXn
,Rn hQn2. H~ STU% %pn2 , ,^! Phn2 ThT}n2
$s! >+% tc MICC) Q STU% s drn2 *Pn2 *!
t*on2 %R% 2!ao d\%h thT}n2 $s! >+% tc. Mr%
Sj%h %wa In%ote*$s -Q %+n2 %f' $Pt tZ' hU' %R%
>+y tO% >+% tc %ho !`% 2!X! thj%h %R% S!v+ .!`n
thT}n2 $s! thTun2 STU% s drn2 t*on2 %R% 2!ao
d\%h >+% tc. H~ %hzt %hW tT}n2 xn2 %wa Cpn2
Td% G!Nn hU' >+% v HU' S]n2 M+a ,Rn Q+%
tc HQn2 hoR. In%ote*$s S|+ t!Nn S STU% ,an
hQnh Qo n$ 1@4<. In%ote*$s 2|n Sy nhft S
STU% %Z' nhZt t*on2 n$ 0)1) Q t*^ thQnh %_
h!`+ -a% ty n2Qy )1 thRn2 1 n$ 0)11. A! %|n
h!V+ In%ote*$s& Chjnh 'hw >+an %hx% thT}n2
$s! %n2 nhT nh!v+ ,Nn .h+ a% tT nhn nNn
h!V+ In%ote*$s. NhT Zy ,Nn .h+ a% tT nhn
,ao 2]$B 6+ft .hg+1 nhZ' .hg+1 %R% %h+yNn 2!a
tQ! %hjnh thT}n2 $s!1 %R% %h+yNn 2!a 'h hU'
6+ft .hg+1 $p! 2!d! hX! >+an1 2!ao nhZn Zn tX!
hQn2 h_a1 %pn2 ty ,Xo h!V$1 %R% %h+yNn 2!a tjn
drn2 >+% tc1 Q doanh s ,Rn hQn2 Q >+Xn -e
th+ $+a.
:.at are Inoterms 9se= forZ
In%ote*$s ass!st t*ade '*a%t!t!one*s !n !nte*'*et!n2
the $ost %o$$on-y +sed !nte*nat!ona- t*ade
te*$s. Us!n2 %o**e%t In%ote*$s !n an !nte*nat!ona-
t*ansa%t!on *ed+%es %ons!de*a,-y +n%e*ta!nt!es
a*!s!n2 "*o$ the d!""e*ent !nte*'*etat!on o" s+%h
te*$s !n d!""e*ent %o+nt*!es. They a''o*t!on
!nte*nat!ona- t*ade t*ansa%t!on %osts and
*es'ons!,!-!t!es ,et#een ,+ye*s M!$'o*te*s) and
se--e*s Me6'o*te*s) and *e"-e%t $ode*n7day
t*ans'o*tat!on '*a%t!%es. In%ote*$s ass!st !n
s!2n!"!%ant-y *ed+%!n2 $!s+nde*stand!n2s a$on2
t*ade*s and the*e,y $!n!$!E!n2 t*ade d!s'+tes and
-!t!2at!on. Ho#ee*1 the!* s%o'e !s -!$!ted to
$atte*s *e-ated to the !nte*nat!ona- *!2hts and
o,-!2at!ons o" the 'a*t!es !no-ed !n the %ont*a%t
o" sa-e #!th *es'e%t to the de-!e*y o" the 2oods
so-d. Th+s1 they a''-y to the %ont*a%t o" %a**!a2e1
In%ote*$s dn2 SV -Q$ 2[& In%ote*$s h t*U h~%
!Nn thT}n2 $s! t*on2 !`% 2!X! thj%h %R% S!v+
.hoXn thT}n2 $s! >+% tc STU% s drn2 'h
,!cn nhft. S drn2 In%ote*$s %hjnh 6R% t*on2
$Pt 2!ao d\%h >+% tc -Q$ 2!X$ SRn2 .V sa
.hpn2 %hO% %hOn 'hRt s!nh ty !`% 2!X! thj%h
.hR% nha+ ty n2q nhT Zy ^ %R% nTd% .hR% nha+.
Phn , %h! 'hj 2!ao d\%h thT}n2 $s! >+% tc Q
t*R%h nh!`$ 2!qa n2Tu! $+a MnhZ' .hg+) Q
n2Tu! ,Rn M6+ft .hg+) Q 'hXn Rnh tZ' >+Rn Zn
tX! h!`n Ss!. In%ote*$s 2!i' 2!X$ SRn2 .V sa
h!V+ -|$ 2!qa %R% thT}n2 nhn Q do S_ 2!X$
th!V+ t*anh %hf' thT}n2 $s! Q t*anh %hf'. T+y
nh!Nn1 'hs$ ! %wa h~ STU% 2!d! hsn t*on2 %R%
fn Sv -!Nn >+an Scn >+yvn Q n2ha r >+% tc
%wa %R% ,Nn tha$ 2!a Qo hU' S]n2 $+a ,Rn S!
d! !`% %+n2 %f' %R% hQn2 hoR S ,Rn. D[ Zy1
h~ R' drn2 S! d! %R% hU' S]n2 Zn %h+yVn1
.hpn2 'hX! -Q hU' S]n2 $+a ,Rn.
not the %ont*a%t o" sa-e.
:.$ )ere t.e INC3-ERM1 %@@@ re&ise=Z
INCOTERMS 0)1) a*e the +'dated e*s!on o"
INCOTERMS 0))). INCOTERMS 0)1)
hae ,een dee-o'ed as a *es+-t o" an e6tens!e
*e!e# o" %+**ent sh!''!n2 '*a%t!%es and t*ends !n
an e""o*t to .ee' +' #!th the *a'!d e6'ans!on o"
#o*-d t*ade. The .ey d*!e*s "o* th!s +'date
!n%-+deB a need "o* !$'*oed %a*2o se%+*!ty1
%han2es to the Un!"o*$ Co$$e*%!a- Code !n
0))8 that *es+-ted !n a de-et!on o" U.S. sh!'$ent
and de-!e*y te*$s1 and ne# t*ends !n 2-o,a-
t*ans'o*tat!on.
Ts! sao %R% INCOTERMS 0))) sa S!&
INCOTERMS 0)1) -Q 'h!Nn ,Xn %Z' nhZt %wa
INCOTERMS 0))). INCOTERMS 0)1)
S STU% 'hRt t*!Vn nhT -Q .ct >+X %wa $Pt sa
6e$ 6{t $^ *Pn2 host SPn2 Zn %h+yVn h!`n ts!
Q 6+ hTdn2 t*on2 $Pt n -a% SV theo .\' d! sa
$^ *Pn2 nhanh %h_n2 %wa thT}n2 $s! thc 2!d!.
CR% t*[nh S!v+ .h!Vn %ho ,Xn %Z' nhZt nQy ,ao
2]$B $Pt nh+ %|+ SV %X! th!`n an n!nh hQn2 h_a1
thay S! -+Zt thT}n2 $s! thn2 nhft Qo n$
0))8 dtn Scn !`% 6_a $Pt -p hQn2 %wa M Q
%R% S!v+ .hoXn 2!ao hQn21 Q 6+ hTdn2 $d!
t*on2 2!ao thpn2 Zn tX! toQn %|+.
5o) =o INC3-ERM1 %@1@ =iffer from
INC3-ERM1 %@@@Z
In add!t!on to '*o!d!n2 a set o" *+-es "o* the
!nte*'*etat!on o" %o$$on-y +sed t*ade te*$s1
INCOTERMS 0)1) s!2n!"!%ant-y *e!se A*o+'
9 -!sted !n INCOTERMS 0))).
The "!e INCOTERMS 0))) -!sted !n A*o+' 9
!n%-+ded the "o--o#!n2B
D2( 9e-!e*ed At ;*ont!e*
DE1 9e-!e*ed E6 Sh!'
DE/ 9e-!e*ed E6 Q+ay
DD0 9e-!e*ed 9+ty Un'a!d
DD+ 9e-!e*ed 9+ty Pa!d
INCOTERMS 0)1) %onta!n the "o--o#!n2
%ate2o*!esB
D2- 9e-!e*ed At Te*$!na-
D2+ 9e-!e*ed At P-a%e
DD+ 9e-!e*ed 9+ty Pa!d
Mo*eoe*1 INCOTERMS 0)1) *ed+%e the
n+$,e* o" In%ote*$ 2*o+'!n2s "*o$ "o+* to t#o1
a--o#!n2 t*ade e6'e*ts to %hoose the $ost s+!ta,-e
*+-e *e-ated to the $ode o" t*ans'o*t.
The 14 INCOTERMS 0))) %onta!ned "o+*
essent!a- %ate2o*!es o" In%ote*$s. They #e*eB
A*o+' E 9e'a*t+*e
A*o+' ; Ma!n %a**!a2e +n'a!d
A*o+' C Ma!n %a**!a2e 'a!d
A*o+' 9 A**!a-.
The t#o $a!n %ate2o*!es o" INCOTERMS 0)1)
a*e no# o*2an!Eed ,y $odes o" t*ans'o*t. Used !n
!nte*nat!ona- as #e-- as !n do$est!% %ont*a%ts "o*
the "!*st t!$e1 the ne# 2*o+'s a!$ to s!$'-!"y the
d*a"t!n2 o" %ont*a%ts and he-' ao!d
$!s+nde*stand!n2s ,y %-ea*-y st!'+-at!n2 %e*ta!n
o,-!2at!ons o" ,+ye*s and se--e*s.
<ro9p 1. Inoterms t.at app#$ to an$ mo=e of
transport are:
EB: E6 Wo*.s
(C2 ;*ee Ca**!e*
C+- Ca**!a2e Pa!d To
CI+ Ca**!a2e And Ins+*an%e Pa!d To
D2- 9e-!e*ed At Te*$!na-
D2+ 9e-!e*ed At P-a%e
DD+ 9e-!e*ed 9+ty Pa!d
GQ$ thc nQo SV INCOTERMS 0)1) .hR%
nha+ ty INCOTERMS 0)))& N2oQ! !`% %+n2
%f' $Pt tZ' hU' %R% >+y tO% %ho !`% 2!X! thj%h
%R% S!v+ .!`n thT}n2 $s! thTun2 STU% s drn21
INCOTERMS 0)1) SRn2 .V 6e$ 6{t -s! ,Xn2
9 STU% -!`t .N t*on2 INCOTERMS 0))).
N$ INCOTERMS 0))) STU% -!`t .N t*on2
,Xn2 9 ,ao 2]$ nhqn2 S!v+ sa+ SyB 9A; A!ao
ts! ,!Nn 2!d! 9ES 9e-!e*ed E6 Sh!' 9EQ
9e-!e*ed E6 Q+ay 99U 9e-!e*ed 9+ty 99P
%hTa t*X INCOTERMS 9e-!e*ed 9+ty Pa!d
0)1) ,ao 2]$ %R% -os! sa+B 9AT A!ao Ts! 2a
9AP A!ao Ts! N}! 99P 9e-!e*ed 9+ty Pa!d
H}n nqa1 INCOTERMS 0)1) 2!X$ s -TUn2
%R% nh_$ In%ote*$ 8701 %ho 'h{' %R% %h+yNn 2!a
thT}n2 $s! SV -aa %h~n %R% >+y tO% thj%h hU'
nhft -!Nn >+an Scn 'hT}n2 thx% Zn tX!.
14 INCOTERMS 0))) %_ ,n -os! th!ct yc+
%wa In%ote*$s. _ -QB TZ' SoQn E 7 ; TZ' SoQn
.h^! hQnh 7 Zn %h+yVn %hTa thanh toRn %hjnh
nh_$ C 7 Zn %h+yVn t*X Nh_$ 9 7 GTUt. Ha!
-os! %hjnh %wa INCOTERMS 0)1) STU% t
%hx% theo %R% 'hT}n2 thx% Zn tX!. TU% s
drn2 t*on2 >+% tc %n2 nhT t*on2 hU' S]n2 -|n
S|+ t!Nn t*on2 nTd%1 %R% nh_$ $d! nhh$ $r%
Sj%h S}n 2!Xn h_a !`% sosn thXo hU' S]n2 Q
2!i' t*Rnh nhqn2 h!V+ -|$ ,hn2 %R%h >+y S\nh
* n2ha r nhft S\nh %wa n2Tu! $+a Q n2Tu!
,Rn.
Nh_$ 1. In%ote*$s $Q R' drn2 %ho ,ft .
'hT}n2 thx% Zn tX! -QB EW E6 Wo*.s ;CA
CPT nhQ %+n2 %f' $!n 'hj Zn %h+yVn t*X t!vn
Zn %h+yVn CIP Q ,Xo h!V$ t*X t!vn 9AT A!ao
Ts! 9AP 2a A!ao Ts! zt 99P 9e-!e*ed 9+ty
Pa!d Nh_$ 0. In%ote*$s %_ R' drn2 S! d! ,!Vn
Q Zn tX! STun2 th+ nP! S\a %hB ;AS $!n 'hj
Cn2 d! tQ+ ;OB ;*ee On Ban C;R Ch! 'hj Q
Zn tX! %h! 'hj CI;1 ,Xo h!V$1 Q Zn tX! H}n
nqa1 ha! nh_$ STU% -!`t .N ^ t*Nn -T+ e 2!X$ s
-TUn2 In%ote*$s 14711 . C+! %n21
INCOTERMS 0)1) %+n2 %f' thN$ hTdn2 dtn
hq+ j%h Q -Q$ * n2ha r. Dj dr1 %R% S!v+
.hoXn sa S! %n2 2!X! thj%h * *Qn2 >+y S\nh
v !`% s drn2 %R% thw tr% S!`n t1 thpn2 t!n %h!
t!ct -!Nn >+an Scn an n!nh thpn2 >+an %ho %R% -p
hQn2 Q %+n2 %f' -u! .h+yNn S! d! thT}n2 $s!
t*on2 nTd%.
<ro9p %. Inoterms t.at app#$ to sea an=
in#an= )ater)a$ transport on#$:
(21 ;*ee A-on2s!de Sh!'
(34 ;*ee On Boa*d
C(R Cost And ;*e!2ht
CI( Cost1 Ins+*an%e1 and ;*e!2ht
;+*the*1 the t#o ne# 2*o+'!n2s -!sted a,oe note
a *ed+%t!on o" the n+$,e* o" In%ote*$s "*o$ 14
to 11.
;!na--y1 INCOTERMS 0)1) '*o!de add!t!ona-
he-'"+- 2+!dan%e and %-a*!"y o,-!2at!ons. ;o*
!nstan%e1 the *e!sed te*$s a-so s'e-- o+t *+-es
*e2a*d!n2 the +se o" e-e%t*on!% '*o%ed+*esm deta!-
!n"o*$at!on on se%+*!ty7*e-ated %-ea*an%es "o*
sh!'$entsm and o""e* ad!%e #!th *es'e%t to
do$est!% t*ade.
Can I sti## 9se t.e INC3-ERM1 %@@@Z
A%%o*d!n2 to the Inte*nat!ona- Cha$,e* o"
Co$$e*%e1 a-- %ont*a%ts $ade +nde*
INCOTERMS 0))) *e$a!n a-!d een a"te*
0)11. In add!t!on1 a-tho+2h the ICC *e%o$$ends
+s!n2 INCOTERMS 0)1) a"te* 0)111 'a*t!es to
a %ont*a%t "o* the sa-e #!th *es'e%t o" the de-!e*y
o" 2oods %an a2*ee to +se any e*s!on o"
In%ote*$s a"te* 0)11. It !s !$'o*tant1 ho#ee*1 to
%-ea*-y s'e%!"y the %hosen e*s!on
INCOTERMS 0)1)1 INCOTERMS 0)))1 o*
any ea*-!e* e*s!on.
:.ere an I o"tain a op$ of t.e ne)
INC3-ERM1 %@1@Z
:o+ %an '+*%hase a %o'y o" the ne#
INCOTERMS 0)1) "*o$ the ICC #e,s!te.
:.ere an I #earn more a"o9t t.e ne)
InotermsZ
The*e a*e a n+$,e* o" '*!ate se%to* and
2oe*n$ent o*2an!Eat!ons that o""e* #o*.sho's1
#e,!na*s1 and se$!na*s *e-ated to the ne#
In%ote*$s. ;o* #e,!na*s and othe* eents *e-ated
to In%ote*$s and $any othe* to'!%s o" t*ade%*a"t
ed+%at!on that a*e ,e!n2 o""e*ed ,y the U.S.
Co$$e*%!a- Se*!%e and !ts 'a*tne*s !n s+''o*t o"
the P*es!dent3s Nat!ona- E6'o*t In!t!at!e1 yo+
$ay !s!t o+* T*ade Eents Sea*%h 9ata,ase.
Tp! %_ thV tn s drn2 INCOTERMS 0)))&
Theo Phn2 ThT}n2 $s! >+% tc1 tft %X %R% hU'
S]n2 STU% tha% h!`n theo INCOTERMS 0)))
tn %_ h!`+ -a% n2ay %X sa+ n$ 0)11. N2oQ! *a1
$z% d ICC .h+ycn %Ro s drn2 INCOTERMS
n$ 0)1) sa+ .h! n$ 0)111 %R% ,Nn tha$ 2!a
hU' S]n2 ,Rn hQn2 S! d! !`% 2!ao hQn2 %_ thV
S]n2 e s drn2 ,ft . 'h!Nn ,Xn %wa In%ote*$s
sa+ n$ 0)11. !v+ >+an t*~n2 -Q1 t+y nh!Nn1
>+y S\nh * INCOTERMS 'h!Nn ,Xn -aa %h~n
0)1)1 INCOTERMS 0)))1 hoz% ,ft .[ 'h!Nn
,Xn nQo t*Td% S_. Tp! %_ thV %_ STU% $Pt ,Xn
sao %wa INCOTERMS $d! 0)1)& Bsn %_ thV
$+a $Pt ,Xn sao %wa INCOTERMS $d! 0)1)
ty t*an2 #e, %wa ICC. Tp! %_ thV t[$ h!V+ thN$
v In%ote*$s $d!& C_ $Pt s %wa .h+ a% tT
nhn Q %R% t %hx% %hjnh 'hw %+n2 %f' hP!
thXo1 hP! thXo1 hP! thXo -!Nn >+an Scn In%ote*$s
$d!. ! d! %R% hP! thXo Q %R% sa .!`n .hR%
-!Nn >+an Scn In%ote*$s Q nh!v+ %hw Sv .hR%
t*ade%*a"t 2!Ro dr% San2 STU% %+n2 %f' ,^!
thT}n2 $s! Hoa / Q %R% S! tR% t*on2 h t*U
%wa SRn2 .!cn 6+ft .hg+ >+% 2!a %wa Tn2
thn21 ,sn %_ thV t*+y %Z' Qo %} s^ dq -!`+
thT}n2 $s! Sa .!`n T[$ .!c$ %wa %hin2 tp!.
INCOTERMS AND THE EXPORTER

+nternationa% Commer)ia% TermsF no5n as
-+n)oterms0F are internationa%%' a))epted
terms defining the responsi4i%ities of
exporters and importers in the arrangement
of shipments and the transfer of %ia4i%it'
in&o%&ed at &ario/s stages of the transa)tion!
+n)oterms do not )o&er o5nership or the
transfer of tit%e of goods! +t is )r/)ia% to agree
on an +n)oterm at the start of a
negotiationIJ/otation of a sa%eF as it 5i%%
affe)t the )osts and responsi4i%ities in&o%&ed
in shippingF ins/ran)e and tariffs! The ne5
+n)oterms "D1D r/%es 5ere re&ised 4' the
INCOTERMS D CC h!`n 6+ft .hg+ thT}n2
$s! >+% tc1 STU% 2~! -Q KIn%ote*$sK1 STU% >+%
tc %hf' nhZn %R% S!v+ .hoXn 6R% S\nh t*R%h
nh!`$ %wa %R% nhQ 6+ft .hg+ Q nhZ' .hg+ t*on2
!`% , t*j %R% -p hQn2 Q %h+yVn 2!ao t*R%h
nh!`$ tha$ 2!a ^ %R% 2!a! Sosn .hR% nha+ %wa
2!ao d\%h. In%ote*$s .hpn2 ,ao 2]$ >+yvn s^
hq+ hoz% %h+yVn 2!ao >+yvn s^ hq+ hQn2 hoR.
!v+ >+an t*~n2 -Q S]n2 e t*Nn In%ote*$ $Pt sa
.h^! S|+ %wa $Pt %+P% thT}n2 -TUn2 ,Ro 2!R
,Rn1 [ n_ sW Xnh hT^n2 Scn %h! 'hj Q t*R%h
nh!`$ tha$ 2!a ,Xo h!V$1 Zn %h+yVn Q th+c
>+an. CR% In%ote*$s 0)1) >+y S\nh STU% sa
S!1 , s+n2 do Phn2 ThT}n2 $s! >+% tc Q sW
t*^ thQnh %_ h!`+ -a% ty n2Qy 1 thRn2 1 n$
0)11. Bn S!v+ .!`n S STU% -os! ,Y M9A;1
9EQ1 9ES1 99U) Q ha! STU% thN$ QoB A!ao
ts! P-a%e M9AP) Q A!ao ts! Te*$!na- M9AT). CR%
+nternationa% Cham4er of Commer)e and 5i%%
4e)ome effe)ti&e 7an/ar' 1F "D11! 8o/r
terms 5ere e%iminated ($A8F $EQF $E;F
$$9) and t5o 5ere added: $e%i&ered at
(%a)e ($A() and $e%i&ered at Termina%
($AT)!
The modifi)ations affe)t o4%igationsF ris
transferF and )ost sharing for the se%%er and
4/'erF res/%ting in 4etter )%arifi)ation and
app%i)ation of the e%e&en (11) +n)otermsF and
)onsistent 5ith the 5a' g%o4a% trade is
a)t/a%%' )ond/)ted sin)e the %ast /pdate in
"DDD!
+n an' sa%es transa)tionF it is important for
the se%%er and 4/'er to agree on the terms of
sa%e and no5 pre)ise%' 5hat is in)%/ded in
the sa%e pri)e! Exporters sho/%d )hoose the
+n)oterm that 5ors 4est for their )ompan'F
4/t a%so 4e prepared to J/ote on other
terms!
;ee VE$( 8ast8a)ts- Responding to
+nJ/iries
+nexperien)ed exporters ma' 5ant to /se the
+n)oterm -Ex Kors0 (ELK)F 4e)a/se this
term )arries the %east 4/rden for them! 9nder
ELKF an exporterMs responsi4i%it' ends at
their fa)i%it'Ms %oading do)F 5hi)h in)%/des
maing the goods a&ai%a4%e for pi) /p and
pro&iding an' prod/)t information needed for
fi%ing the E%e)troni) Export +nformation (EE+)!
The importerMs agent (i!e! their designated
9!;! freight for5arder) 5i%% arrange and pa'
for the pre-)arriageF shippingF ins/ran)e and
an' additiona% )osts from the exporterMs door!
A sa%e 4ased on the +n)oterm -C+80F on the
other handF reJ/ires the exporter to arrange
and pa' for the pre-)arriageF shippingF and
ins/ran)e to a named port! +n this )aseF the
sa%e pri)e (in&oi)e) in)%/des not on%' the
(C)ost of goodsF 4/t a%so (+)ns/ran)e and
(8)reight )osts that the importing 4/'er pa's
the exporting se%%er!
Khen designating the +n)oterm on a
)ommer)ia% in&oi)e or a J/otation to the
4/'erF the term sho/%d 4e fo%%o5ed 4' the )it'
or port of %oadIdis)hargeF s/)h as -ELK
8a)tor'F Ri)hmondF VA0 or -C+8 Rotterdam0!
9sing the a)t/a% address is 4etter to a&oid
an' )onf/sion or misinterpretation!
Comm/ni)ation thro/gho/t the entire
pro)ess is )r/)ia%! 8or examp%eF /nder Ex
KorsF the shipper sho/%d notif' the importer
5hen the goods are read' and after the'
ha&e 4een pi)ed /p 4' the importerMs
se%e)ted )arrier! The exporterMs freight
for5arder often pro&ides the &esse% and sai%
thay S! Xnh hT^n2 Scn n2ha r1 %h+yVn 2!ao
*w! *o1 Q %h!a s %h! 'hj %ho n2Tu! ,Rn Q n2Tu!
$+a1 .ct >+X -Q -Q$ * Q xn2 drn2 M11)
In%ote*$s $Tu! $Pt1 Q 'h hU' d! thT}n2 $s!
toQn %|+ -Q tha% sa tha% h!`n .V ty .h! %Z' nhZt
%+! %n2 t*on2 n$ 0))).
T*on2 ,ft . 2!ao d\%h ,Rn hQn21 S!v+ >+an
t*~n2 -Q n2Tu! ,Rn Q n2Tu! $+a S]n2 e v %R%
S!v+ .hoXn %wa ,Rn hQn2 Q ,!ct %hjnh 6R%
nhqn2 2[ STU% ,ao 2]$ t*on2 2!R ,Rn. +ft
.hg+ nNn %h~n In%ote*$ -Q$ !`% tt nhft %ho
%pn2 ty %wa h~1 nhTn2 %n2 STU% %h+gn ,\ SV
t*j%h dtn %R% S!v+ .hoXn .hR%. e$ DE9P
;ast;a%ts7R' xn2 :N+ %|+ 6+ft .hg+ th!c+ .!nh
n2h!`$ %_ thV $+n s drn2 KE6 Wo*.sK
In%ote*$ MEW)1 ,^! [ th+Zt n2q nQy $an2
2Rnh nzn2 %ho h~. Theo EW1 t*R%h nh!`$ %wa
6+ft .hg+ .ct thi% ts! do%. tX! %} s^ %wa h~1
t*on2 S_ ,ao 2]$ hQn2 hoR %_ sn SV nhZn Q
%+n2 %f' ,ft . thpn2 t!n sXn 'hg$ %|n th!ct %ho
!`% nP' S}n Thpn2 t!n 6+ft .hg+ S!`n t MEEI).
CR% Ss! -e nhZ' .hg+ Mtx% -Q %h S\nh M 2!ao
nhZn Zn tX! hQn2 h_a) sW sO' 6c' Q %h! t*X %ho
t!vn Zn %h+yVn1 ,Xo h!V$1 Zn %h+yVn Q %R%
%h! 'hj , s+n2 ty %a 6+ft .hg+. BRn daa t*Nn
In%ote*$ KCI;K1 $zt .hR%1 S! hY! nhQ 6+ft .hg+
SV sO' 6c' Q t*X t!vn %ho !`% Zn %h+yVn t!vn1
Zn %h+yVn Q ,Xo h!V$ %ho %Xn2. T*on2 t*Tun2
hU' nQy1 2!R ,Rn hQn2 MhoR S}n) ,ao 2]$ .hpn2
%h -Q ost MC) %wa hQn2 hoR1 nhTn2 %n2 %_ MI)
ns+*an%e Q M;) *e!2ht %h! 'hj $Q n2Tu! $+a
nhZ' .hg+ t*X t!vn %ho n2Tu! ,Rn 6+ft .hg+.
/h! %h S\nh In%ote*$ t*Nn hoR S}n thT}n2 $s!
hoz% ,Ro 2!R %ho n2Tu! $+a1 thu! hsn 'hX! STU%
theo sa+ ,^! thQnh 'h hoz% %Xn2 ns' 6X1 %hn2
hsn nhT KNhQ $Ry EW1 R!%h$ond1 DAK hay
KCI; Rotte*da$K. S drn2 S\a %h tha% tc -Q tt
h}n SV t*Rnh ,ft . sa nh|$ -tn hoz% h!V+ sa!.
Thpn2 t!n -!Nn -s% t*on2 s+t toQn ,P >+R t*[nh -Q
*ft >+an t*~n2. Dj dr1 t*on2 tR% 'hg$ Dj dr1
n2Tu! 2! hQn2 'hX! thpn2 ,Ro %ho nhQ nhZ'
.hg+ .h! hQn2 hoR S sn sQn2 Q sa+ .h! h~ S
STU% %h~n ,^! nhQ %+n2 %f' d\%h r -aa %h~n
%wa nhZ' .hg+. A!ao nhZn Zn %h+yVn hQn2 h_a
%wa n2Tu! 6+ft .hg+ thTun2 6+yNn %+n2 %f' tQ+
Q n2Qy S! th+yvn1 hoz% d\%h r Zn %h+yVn
hQn2 h_a .hpn2 s drn21 Q h_a S}n ,ft . Ss!
dT}n2 %wa Zn S}n hoz% s h_a S}n STun2 hQn2
.hpn2 SV %R% ,Nn thpn2 ,Ro %R% thYa th+Zn Q
t[nh t*sn2 -p hQn2 M$z% d v $zt . th+Zt theo
E6 Wo*.s %R% nTd% 6+ft .hg+ %wa t*R%h nh!`$
.ct thi% ts! ,cn tQ+ ,% 6c'1). In%ote*$ nzn2 nv
nhft S! d! 6+ft .hg+ -Q 9e-!e*ed 9+ty Pa!d
M99P)1 ,^! [ tft %X %R% thYa th+Zn Q %h! 'hj
%wa nhQ 6+ft .hg+ %h\+1 thTun2 -Q d! sa h t*U
%wa %R% Ss! -e M%h+yVn hQn2 h_a Q %R% nhQ $p!
2!d! hX! >+an).
Dd! 99P1 6+ft .hg+ 'hX! %h\+ $~! *w! *o Q %h!
'hj Zn %h+yVn1 ,ao 2]$ %X nh!`$ r Q th+c
>+an1 %ho Scn .h! nhZn hQn2 th[ n2Tu! nhZ'
.hg+1 thTun2 -Q ts! nhQ $Ry hoz% .ho %wa nhQ
nhZ' .hg+. /V ty .h! 99P Ss! d!`n %ho %R%
n2ha r t! Sa %ho n2Tu! ,Rn1 n_ .hpn2 STU%
.h+ycn %Ro %ho %R% %pn2 ty $d! SV 6+ft .hg
dateF or air )argo ser&i)e /sedF and an'
o)ean 4i%% of %ading or air5a' 4i%% n/m4er to
eep the parties informed of the
arrangements and stat/s of the shipment
(e&en tho/gh te)hni)a%%' /nder Ex Kors the
exporterMs responsi4i%it' ends at their %oading
do))!
The most 4/rdensome +n)oterm for the
exporter is $e%i&ered $/t' (aid ($$()F
4e)a/se a%% arrangements and )osts are
4orne 4' the exporterF /s/a%%' 5ith the
assistan)e of agents (freight for5arders and
)/stoms ho/se 4roers)! Kith $$(F the
exporter 4ears a%% riss and )osts of
transportationF in)%/ding d/ties and tariffsF
/nti% the goods are re)ei&ed 4' the importerF
/s/a%%' at the importerMs fa)tor' or
5areho/se! ;in)e $$( represents the
maxim/m o4%igation to the se%%erF it is not
re)ommended for )ompanies that are ne5-
to-export!
Case 1t9=$
-ERM1 3( -R2DE
Wh!%h o" the "o--o#!n2 te*$s a*e %o**e%t-y +sed a%%o*d!n2 to Incocerms 1//8> I# yo!r ans#e* !s
KNo1K 2!e yo+* *easons. 6Note- .The*e $ay ,e $o*e than one %o**e%t ans#e* !n ea%h se%t!on.
1. A %ont*a%t *e>+!*!n2 the e6'o*te* to send the %onnta%t 2oods ,y *oad "*o$ /ena to a$,!a #!th
"*e!2ht 'a!d ,y the e6'o*te*.
a. CL; G+sa.a :ES NO
,. C;R G+sa.a :ES NO
%. CPTG+sa.a :ES NO
d. C;R Na!*o,! :ES NO
e. ;OT Na!*o,! :ES NO
0. A %ont*a%t *e>+!*!n2 an e6'o*te* !n MoEa$,!>+e to de-!e* the %ont*a%t 2oods !n Be!*a.
MoEa$,!>+e1 "o* sh!'$ent ,y sea to 9a*es Sa-aa$1 TanEan!a.
a. ;AS Be!*a :ES NO
,. ;OB Be!*a :ES NO
%. ;CA Be!*a :ES NO
d. ;OB 9a*es Sa-aa$ :ES NO
4. A %ont*a%t *e>+!*!n2 an e6'o*te* !n Eth!o'!a to send the %ont*a%t 2oods ,y a!* "o* de-!e*y !n
W!ndhoe.1 Na$!,!a
a. CI; W!ndhoe. :ES NO
,. CIP W!ndhoe. :ES NO
%. 99U W!ndhoe. :ES NO
d. 9ES W!ndhoe. :ES NO
1. a. No. Not a 1@@) In%ote*$ ,. No. Sh!' te*$ on-y
%. :es d. No. C;R !s not to Na!*o,! e. No. Not an In%ote*$
0. a. :es ,. :es %. :es d. No. Sh!'$ent !s !n Be!*a
4. a. No. Sh!'$ent on-y te*$ ,. :es %. :es d. No. Sh!' on-y te*$
9e-!e*y #he*e&
-rans#ate into >ietnamese
Sa$'-e 0. CONTRACT ;OR GUBRICANTS.
CONTRACT No )10@0
S!n2a'o*e 9e%e$,e* 0@
th
1 1@..
Th!s %ont*a%t !s $ade ,et#een D!etna$ Nat!ona- Pet*o-e+$ E6'o*t I$'o*t Co*'o*at!on
MPETROGIME) 11 /ha$ Th!en1 Hano! MSo%!a-!st Re'+,-!% o" D!etna$) Ca,-e add*essB KPet*o-!$e6
Hano!K Mhe*e!na"te* *e"e*en%e to as BU:ER) and AAIP PETROGI S. '. A. S!n2a'o*e B*an%h
M*e"e*en%e to as SEGGER) #he*e,y !t !s a2*eed as "o--o#sB
4) Ob5ect of the Contract
SEGGER +nde*ta.es to de-!e* -o BU:ER !n D!etna$ .on C;R ,as!s the "o--o#!n2 -+,*!%antsB
Ite$ G+,*!%ants Q+ant!ty C;R HCM C;R HP
)1 ARMU4 8(8 9RUMS 6 8()
18) /A US9MT
M1(8.88 MT)
)0 CRMU4 8(8 9RUMS 6 8=)US9MT
18) /A
M1(8.88 MT)
The a,oe '*!%es a*e e6'*essed !n US do--a*s 'e* $et*!% ton net C;R 'o*t o" D!etna$1 de-!e*!es as
'e* A*t. < ,e-o#1 and *e$a!n "!6ed d+*!n2 the te*$ o" th!s %ont*a%t and '*o!ded that an I**eo%a,-e
GC !n *es'e%t the*eo" has ,een not!"!ed to Se--e* ,y S!n2a'o*e Indos+eE Ban. '*!o* to 411)1@ ..
'. ,peci#ication o# L!bricants
The s'e%!"!%at!on o" -+,*!%ants !n d*+$s s+''-!ed +nde* th!s Cont*a%t sha-- %on"o*$ to the
s'e%!"!%at!ons set o+t !n A''end!6 1 atta%hed to he*eto1 #h!%h !s an !nte2*a- 'a*t o" th!s Cont*a%tm
O*!2!n o" '*od+%ts #!-- ,e Ita-y1 Ho--and o* S!n2a'o*e at SEGGERHS o't!on.
*. Pac6aging
Pa%.a2ed '*od+%ts #!-- ,e de-!e*ed !n AAIP standa*d ne# stee- d*+$s1 o" a,o+t 1.01.) $$
th!%.ness. The d*+$s #!-- ,e "!--ed at 18) .2 not #e!2ht.
8. Pay$ent
8.1. SEGGER #!-- ,e 'a!d ,y .I**eo%a,-e GC o'ened ,y D!et%o$,an.HHano! and ad!sed to Se--e*
th*o+2h Indos+eE Ban. !n S!n2a'o*e 'aya,-e at s!2ht a2a!nst "!*st '*esentat!on o" "+-- set o" sh!''!n2
do%+$ents
8.0 SEGGER sha-- e""e%t "!*st sh!'$ent #!th!n 4) days "*o$ date SEGGER *e%e!es not!"!%at!on o"
!**eo%a,-e GC
8.4. A-- %osts o" GC !n S!n2a'o*e sha-- ,e "o* SEGGERHS a%%o+nt
8.8. A-- GC a$end$entHs %ost M!" any) %a+sed ,y the "a!-+*e o" the B+ye* to "o--o# the te*$s and
%ond!t!ons o" 'ay$ent #!-- ,e "o* BU:ERHS a%%o+nt
8.(. The +nde* $ent!oned do%+$ents #!-- ,e "o*#a*ded to BU:ERHS Ban. !$$ed!ate-y a"te* -oad!n2
date
a) S!2ned %o$$e*%!a- !no!%e !n 4 o*!2!na-s
,) C-ean KSh!''ed on Boa*dK O%ean B!-- o" Gad!n2 !n %o$'-ete set o" at -east 4 o*!2!na- 4 non7
ne2ot!a,-e %o'!es s!2ned $ade o+t to o*de* o" KD!et%o$,an.K Hano!
%) Q+a-!tyQ+ant!ty %e*t!"!%ate !ss+ed ,y the Cha$,e* o" Co$$e*%e !n t*!'-!%ate
d) Pa%.!n2 G!st !n t*!'-!%ate
e) Con"!*$at!on o" %a,-e ad!se "o* sh!'$ent !n t*!'-!%ate
") Re%e!'t o" sh!'$aste* a%.no#-ed2!n2 d+e *e%e!'t o" a-- do%+$ents !n t*!'-!%ate non 7 ne2ot!a,-e
%o'!es o" ea%h do%+$ent1 "o* hand!n2 sa$e oe* to PETROGIME Ha!'hon2 o* PETROGIME
Ho%h!$!nh C!ty
'. Penalties
In %ase o" de-ay !n 'ay$ent M!" any)1 BU:ER sha-- *e$!t to SEGGER !nte*est %a-%+-ated "*o$ the
date o" '*esentat!on o" do%+$ents to the ,an. !n S!n2a'o*e to the date o" e""e%t!e *e%e!'t o" d+e
a$o+nt. The !nte*est #!-- ,e %a-%+-ated at GIBOR RATE M< $onths) '-+s 1.( 'e* %ent
,. Deli7eries
P*od+%ts #!-- ,e de-!e*ed !n 'a*t!a- sh!'$ents to ,e a2*eed +'on.
In %ase o"1 t*anssh!'$ent SEGGER sha-- 2!e to BU:ER a-- ne%essa*y deta!- and !n"o*$at!on
=. Ins!rance
Ins+*an%e sha-- ,e e""e%ted ,y BU:ER.
8. Deli7er- Terms
C;R D!etna$ese 'o*ts as 'e* A*t. 1. Aoods to ,e de-!e*ed !n 'a*t!a- sh!'$ents a%%o*dan%e #!th A*t.
<
9. Claims
In %ase o" non 7 %on"o*$!ty o" the >+a-!ty o" the '*od+%ts a%t+a--y de-!e*ed ,y SEGGER #!th the
Cont*a%t s'e%!"!%at!ons1 any %-a!$ %on%e*n!n2 the >+a-!ty o" the 2oods $+st ,e '*esented to SEGGER
#!th!n th*ee $onths "*o$ the date o" de-!e*y.
No %-a!$s sha-- ,e a%%e'ted ,y SEGGER 'a*ty a"te* e6'!*y o" the a,oe 'e*!od
%@. Contingencies
Sho+-d any %!*%+$stan%es a*!se #h!%h '*eent the %o$'-ete o* 'a*t!a- "+-"!--$ent ,y any o" the
'a*t!es o" the!* *es'e%t!e o,-!2at!ons +nde* th!s %ont*a%t1 na$e-yB "!*e1 !%e %ond!t!ons o* any othe*
a%ts o" the e-e$ents1 #a*, $!-!ta*y o'e*at!ons o" any %ha*a%te*1 ,-o%.ade1 '*oh!,!t!on o" e6'o*t o*
!$'o*t o* any othe* %!*%+$stan%es ,eyond the %ont*o- o" the 'a*t!es1 the t!$e st!'+-ated "o* the
"+-"!--$ent o" the o,-!2at!ons sha-- ,e e6tended "o* a 'e*!od e>+a- to that d+*!n2 #h!%h s+%h
%!*%+$stan%es -ast.
I" the s+%h %!*%+$stan%es -ast "o* $o*e than 0) days1 any de-!e*y o* de-!e*!es #h!%h a*e to ,e
'e*"o*$ed +nde* th!s %ont*a%t #!th!n that 'e*!od $ay ,e %an%e--ed on the de%-a*at!on o" e!the*
'a*ty1 and !" the a,oe %!*%+$stan%es -ast "o* $o*e than. 8) days1 ne!the* 'a*ty sha-- hae the
*!2ht to $a.e a de$and +'on the othe* Pa*ty "o* %o$'ensat!on "o* any 'oss!,-e da$a2e.
A 'a*ty +na,-e to $eet !ts o,-!2at!ons +nde* th!s Cont*a%t sha-- !$$ed!ate-y ad!se the othe* 'a*ty
the t!$e o" %o$$en%e$ent and the te*$!nat!on o" the %!*%+$stan%es '*eent!n2 the "+-"!--$ent o" !ts
o,-!2at!ons.
Ce*t!"!%ates !ss+ed ,y the *es'e%t!e Cha$,e* o" Co$$e*%e o" SEGGERHS o* BU:ERHS %o+nt*y sha-- ,e
s+""!%!ent '*oo" o" s+%h %!*%+$stan%es and the!* d+*at!on.
44) Arbitration
A-- d!s'+tes and d!""e*en%es #h!%h $ay a*!se o+t o" the '*esent %ont*a%t o* !n %onne%t!on #!th !t sha--
,e sett-ed1 !" 'oss!,-e1 !n an a$!%a,-e #ay.
In the eent that !t !s not 'oss!,-e to sett-e the$ !n an a$!%a,-e #ay1 the 'a*t!es sha-- *e"e* the $atte*
to A*,!t*at!on !n the Inte*nat!ona- Cha$,e* o" Co$$e*%e !n Pa*!s
42) Other Conditions
10.1 Ne!the* Pa*ty !s ent!t-ed to t*ans"e* !s *!2ht and o,-!2at!ons +nde* the '*esent Cont*a%t to a th!*d
'a*ty #!tho+t the othe* Pa*tyHs '*e!o+s #*!tten %onsent
10.0 A"te* the s!2n!n2 o" the '*esent Cont*a%t1 a-- '*e!o+s ne2ot!at!ons and %o**es'onden%e ,et#een
the Pa*t!es !n %onne%t!on #!th !t sha-- ,e %ons!de*ed n+-- and o!d
10.4 A-- a$end$ents and add!t!ons to the '*esent Cont*a%t a*e a-!d on-y !" they a*e $ade o+t !n
#*!t!n2 and s!2ned ,y ,oth Pa*t!es
10.8 A-- ta6es1 %+sto$s and othe* d+t!es -e!ed !n D!etna$ on the %ont*a%ted P*od+%ts sha-- ,e "o*
BU:ERHS a%%o+nt.
SEGGERB BU:ERB
AAIP PETROGI S.'.A PETROGIME
MS!2ned) MS!2ned)
Pat*!%. ;O/ N2+yen Manh
G+,*!%ants Mana2e* D!%e Aene*a- 9!*e%to*
APPEN9I 1
P*od+%tB A2!' A* M+4
NGAI %ons!sten%yB 4
Wo*.ed 'enet*at!onB 04) d$$
ASTM d*o''!n2 'o!ntB 1@( C de2*ees.
C52+-ER %: NE<3-I2-IN< +RICE ! +27MEN-
%.1. Export +riing 1trategies
-5E PROBLEM
In $any ne2ot!at!ons1 as soon as the e6'o*te*
states a '*!%e1 the ,+ye* ,e2!ns to de$and
%on%ess!ons a,o+t de-!e*y t!$e1 $ethod o"
'ay$ent1 and so on. Con%ess!ons that %an
>+!%.-y $a.e the dea- +n'*o"!ta,-e. Ho# %an the
e6'o*te* ao!d the K'*!%e t*a'K&
T*on2
THE PRINCIPLE
The e6'o*te* $+st 'e*%e!e and '*ese*e the
!nte*de'enden%e o" ee*y as'e%t o" an e6'o*t
ne2ot!at!on. A '*!%e >+otat!on !s ,ased on a set o"
ass+$'t!ons a,o+t de-!e*y1 'ay$ent and
#a**anty te*$s. The %ont*a%t '*!%e $+st *e"-e%t
any %han2e !n. o* *ene2ot!at!on o"1 these
ass+$'t!ons.
N*F
IN MORE DEPTH
E6'o*t!n2 !s not d!""!%+-tm the '*o,-e$ !s $a.!n2 $oney at !t. So$et!$es "!*st7t!$e
e6'o*te*s "a!- to +nde*stand ho# the $any te*$s o" a %ont*a%t *e-ate to ea%h othe*B a -on2e*
#a**anty 'e*!od1 "+* e6a$'-e1 %*eates h!2he* %ostslthe %ont*a%t '*!%e sho+-d *e"-e%t these
%osts. An e6tens!on o" the 'ay$ent 'e*!od %*eates h!2he* %ostsl a2a!n the %ont*a%t '*!%e
sho+-d *e"-e%t the e6tens!on. In "a%t. !*t+a--y ee*y '*o,-e$ that the t#o s!des no*$a--y
ne2ot!ate has a ,ea*!n2 on '*!%e. Most-y the ,+ye*Hs s+22est!ons tend to *a!se the '*!%e1 ,+t
a -o#e*!n2 o" the '*!%e !s 'oss!,-e too. GetHs +se an e6a$'-e to st+dy th!s *e-at!onsh!'
,et#een '*!%e and othe* %ont*a%t te*$s !n $o*e deta!-.
,cenario- De*,ena E-e%t*!% ho'es to e6'o*t !ts ,est7se--!n2 '*od+%tB s$a-- do$est!% e-e%t*!% "ans1
"*o$ De*,ena to Es'e*anEa. A $a*.et st+dy !n Es'e*anEa sho#s that "!"teen ,*ands o" "an a*e
aa!-a,-e !n Es'e*anEa1 none o" the$ $ade !n Es'e*anEa !tse-". Mode-s *an2e "*o$ e6'ens!e1
e-e%t*on!%a--y %ont*o--ed "ans !$'o*ted "*o$ E+*o'e to %hea' '-ast!% '*od+%ts !$'o*ted "*o$
Nona$!a. In ee*y %ase1 the '*!%e st*!.es the e6'o*t $ana2e* o" De*,ena E-e%t*!%1 John
Roya-stone as h!2hB h!s o#n "ans #!-- ,e %o$'et!t!e. Roya-stone ,e2!ns d!s%+ss!ons #!th the
'+*%has!n2 $ana2e* o* Es'e*anEa E-e%t*!%a- I$'o*t!n21 A-!%e S$a*t. S$a*t !s 'a*t!%+-a*-y
!nte*ested !n one o" Roya-stoneHs '*od+%ts1 a th*ee7s'eed1 18)
o
*eo-!n2 tan #!th a 2*a%e"+-1
$ode$ des!2n. Ne2ot!at!on ,e2!ns.
Ea*-y on1 S$a*t !nt*od+%es the >+est!on o" '*!%eB 5What3s the '*!%e o" a "an -!.e that&? Roya-stone
!s an o-d hand at ne2ot!at!onB he .no#s that #hen he states a '*!%e1 !t $+st ,e "o* '*e%!se-y denned
2oods de-!e*ed +nde* '*e%!se-y de"!ned %!*%+$stan%es. He o""e*s a +n!t '*!%e o" k00 and $a.es !t
%-ea* that th!s '*!%e !s ,ased on the "o--o#!n2 ass+$'t!onsB
The s!Ee o" the o*de* !s 4.))) !te$sB
The s'e%!"!%at!on o" the "an !s !dent!%a-le6%e't "o* %o-o*B 1.))) #!-- ,e de-!e*ed !n so-d. 1.))) !n
,-a%.. 1.))) !n *ed. ..
q No add!t!ona- 'a%.a2!n2 o* sa"e-y #a*n!n2s a*e *e>+!*ed ,eyond #hat !s no*$a- !n De*,enam
9e-!e*y !s ;OB MPo*t De*,ena)B
Pay$ent !s ,y !**eo%a,-e1 %on"!*$ed1 at7s!2ht -ette* o" %*ed!tm
9e-!e*y ta.es '-a%e th*ee #ee.s "*o$ the da-e that Roya-stone *e%e!es ad!%e that the -ette* o"
%*ed!t has ,een o'enedm
The #a**anty 'e*!od on the "ans !s th*ee $onths "*o$ the date o" de-!e*y.
S$a*t sees that she !s dea-!n2 #!th an e6'e*!en%ed e6'o*te*. She ,e2!ns to d!s%+ss the !te$s on
Roya-stoneHs -!st.
Or+er ,ire
,mart is not s+*e she %an hand-e 41))) "ansB she #o+-d '*e"e* to o*de* "e#e*1 test the $a*.et1 and
o*de* $o*e -ate* !" th!n2s 2o #e--. Roya-stone $a.es t#o 'o!ntsB "!*st S$a*tHs t*ans'o*t %osts #!--
!n%*ease on a s$a--e*.o*de*1 ,e%a+se 41))) +n!ts !s one %onta!ne* -oadm se%ond1 the +n!t '*!%e #!--
!n%*ease on a s$a--e* o*de*. An o*de* o" 1.))) "ans "o* e6a$'-e #o+-d %ost k0( ea%hlnot k00.
,peci#ications
S$a*t -!.es the %o-o* *an2e1 ,+t she #onde*s !" the '*!%e #o+-d ,e -o#e* !" she o*de*ed on-y one
%o-o*. Roya-stone !s *eady to %+t h!s '*!%e ,y ()% 'e* "an !" the #ho-e o*de* !s the sa$e %o-o*.
Pac4a$in$
Un"o*t+nate-y1 Es'e*anEa has st*!%t *+-es a,o+t 'a%.a2!n2 and sa"etyB -a,e-!n2 o" e-e%t*!%a-
'*od+%ts. S$a*t sho#s Roya-stone the *e2+-at!ons. A"te* a "e# 'hone %a--s1 Roya-stone %a-%+-ates
that $eet!n2 Es'e*anEan standa*ds #!-- add at -east 8)% to the %ost o" ea%h "an.
Incoterm
,mart says that she #o+-d '*e"e* CI; de-!e*y1 Es'e*anEa C!ty. Roya-stone te--s he* that the %ost o"
!ns+*an%e and "*e!2ht ,et#een Pon De*,ena and Es'e*anEa C!ty !s k(0) on an o*de* o" 41))) !te$sB
so$e#hat -ess on an o*de* o" 11))). S$a*t a-so #onde*s #hat the e""e%t #o+-d ,e o" %o--e%t!n2 the
"ans e6 #o*.sm The EW '*!%e1 -oaded !n a %on!a!ne* !s k01.=(la s$a-- sa!n21
Terms o# Payment
S$a*t says that she d!s-!.es -ette*s o" %*ed!t and '*e"e*s to t*ade on o'en a%%o+ntl4) days
net1 #!th a 0n d!s%o+nt "o* 'ay$ent #!th!n ten days. Roya-s!one e6'-a!ns to he* ho# t*ad!n2
on o'en a%%o+nt #!-- !n%*ease h!s %ostsB he #!-- need e6'o*t %*ed!t !ns+*an%e1 and he #!-- hae
to #a!t "o* S$a*tHs %he%. to %-ea*. Based on e6'e*!en%e1 %-ea*an%e #!-- -a.e 8( days. H!s '*!%e
#!-- *!se to k0< 'e* "an on an o*de* "o* 41)))1 ;OB Po*t De*,ena.
S$a*t !s +nha''y ,oth a,o+t the %ost o" the -ette* o" %*ed!t and a,o+t Roya-stoneHs add!t!ona-
'*!%e !" she *e"+ses to o'en one. She s+22ests that she 'ays 0(n o" the '*!%e #!th o*de*1 and the
*e$a!n!n2 >%& on o'en a%%o+nt. Roya-stone has no *eady ans#e* to that '*o'osa-. He >+!%.-y
*e%a-%+-ates h!s '*!%eB !t #o+-d ,e ,e-o# k0<1 '*o,a,-y ,y k1.1).
Date o# Delivery
When S$a*t >+est!ons de-!e*y th*ee #ee.s a"te* the o'en!n2 o" the -ette* o" %*ed!tlRoya-stone
a2a!n *e'-!es #!th "!2+*esB !" she #ants the 2oods soone*1 he %an a**an2e !tl,+t on-y ,y #o*.!n2 an
e6**a sh!"t #!th e6t*a %osts !no-ed. H!s '*!%e #o+-d hae to ,e so$e#hat h!2he*.
3arranty Perio+
Roya-stone !s not #o**!ed a,o+t the >+a-!ty o" h!s "ans1 ,+t he .no#s "*o$ e6'e*!en%e tha! a th*ee7
$onth #a**anty on an ;OB de-!e*y '*od+%es e*y "e# %-a!$s "o* de"e%tsla,o+t t#o %-a!$s 'e*
tho+sand "ans. A s!67$onth #a**anty1 ho#ee*1 !s $o*e %ost-yla,o+t ten %-a!$s 'e* tho+sand "ans.
H!s no*$a- 'o-!%y !s to $a!- a *e'-a%e$ent "an !n the eent o" a %-a!$l#h!%h %osts h!$ a,o+t k8)
"o* the "an1 the 'a%.!n2 and the 'osta2e. I" S$a*t as.s "o* a s!67$onth #a**anty1 !t #!-- add 4)% 'e*
"an to Roya-stone3s %osts.

In th!s -en2thy e6a$'-e1 a-- ne2ot!at!n2 de%!s!ons ,ea* d!*e%t-y on the '*!%e o" the '*od+%t. Nat+*a--y
othe* 'o!nts a*e o'en to ne2ot!at!onm th!s !s C+st a sa$'-!n2. B+t the 2ene*a- 'o!nt !s %-ea*B a mana$er
li4e Royalstone "*o 4no"s *is pro+!ct an+ "*o *as t*oro!$*ly analyre+ *is costs is !nli4ely to lose
money on an e)port +eals!nless, o" %o+*se1 he de%!des to do so. I" Roya-stone !s ea2e* to #!n S$a*t
as a *e2+-a* %+sto$e*1 he $ay ,e *eady to se-- to he* at a -oss "!*st t!$e a*o+nd. O* h!s "a%to*y $ay ,e
so sho*t o" #o*. that he !s '*e'a*ed to a%%e't any Co,leen a -oss7$a.e*. O* the De*,enan
2oe*n$ent $ay $a.e e6'o*t!n2 so att*a%t!e #!th e6'o*t !n%ent!es that Roya-stone %an t*ade at a
-oss ,+t st!-- sho# a '*o"!t at the end o" the day.
The 2ene*a- 'o!nt !s th!sB a 2ood $ana2e* .no#s that a-$ost ee*y de%!s!on $ade d+*!n2 a
ne2ot!at!on !n"-+en%es '*!%elan e6%e--ent $ana2e* %an '+t a do--a*s77and7%ents "!2+*e on th!s
!n"-+en%e.
C21E 1-0D7
In a Dam
Ao*$ T*ad!n2 e6'o*ts %anned "oods "*o$ De*,ena. Ao*$ !s ne2ot!at!n2 o" <)) %ases o" a'*!%ot Ca$
,y *oad to a ne!2h,o*!n2 %o+nt*y. Ao*$3s '*!%e 'e* %ase !s k0). The '*!%e !s ,ased on de-!e*y ;CA
#!th no s'e%!a- 'a%.a2!n2 o* -a,e-!n2. The Ca$ has a s!67$onth e6'!*y date sta$'ed on the -a,e-.
Pay$ent #!-- ,e ,y !**eo%a,-e1 %on"!*$ed1 at7s!2ht -ette* o" %*ed!t. 9e-!e*y date !s t#o days a"te*
the o'en!n2 o" the %*ed!t. 9e%!de #hat !n"-+en%e ea%h %han2e -!sted ,e-o# #!-- hae on the '*!%e 'e*
%ase.
MA) NO CHANAE ME) MINIMAG 9ECREASE
MB) MINIMAG INCREASE M;) APPRECIABGE 9ECREASE
MC) APPRECIABGE INCREASE MA) GARAE 9ECREASE
M9) GARAE INCREASE
1. Red+%t!on o" the o*de* "*o$ <)) %ases to 4)) %ases.
0. 9e-!e*y EW ME6'o*te* $+st hae the 2oods *eady "o* %o--e%t!on !n h!s #a*eho+se.)
4. Re'-a%e$ent o" s!n2-e "-ao* Ma'*!%ot Ca$M ,y a *an2e o" 1) "-ao*s1 so$e o" #h!%h a*e 5e6ot!%.?
8. Chan2e o" -a,e-!n2 to sho# e6a%t n+t*!t!ona- a-+es and !n2*ed!ents Mnot no*$a--y s'e%!"!ed ,y
Ao*$).
(. Chan2e o" 'ay$ent "*o$ -ette* o" %*ed!t to o'en a%%o+nt 'ay$ent d+e 8( days "*o$ date o"
!no!%e.
<. Re'-a%e$ent o" a s!n2-e de-!e*y #!th de-!e*y !n ten !nsta--$ents o" <) %ases oe* a 'e*!od o" one
yea*.
=. In%*ease o" the e6'!*y 'e*!od "*o$ s!6 $onths "*o$ date o" $an+"a%t+*e to t#o yea*s.
1. C. 0. E 4. B7C 8. C (. C <. C =. C
-rans#ate into >ietnamese
;ORM 4B ABC3S CONTRACT
ABC CORPORATION1 as ,ELLER, %on"!*$s ha!n2 so-d to BU:ER the "o--o#!n2 2oods ,y
%ont*a%t $ade on the date ,e-o# and on the te*$s and %ond!t!ons SET 5ORTH HEREcNDER (ND
ON THE REVER,E ,IDE HEREO5.
BU:ER
9ATE
CONTRACT NO
BU:ERHS RE;ERENCE NO.
AOO9S
QUANTIT: UNIT PRICETOTAG AMOUNT
SHIPMENTB
T!$e o" Sh!'$ent T*anssh!'$ents 'e*$!ttednot 'e*$!tted
Po*t o" Goad!n2 Pa*t!a- sh!'$ents 'e*$!ttednot 'e*$!tted
Po*t o" 9est!nat!on
PAC/INAB MAR/INAB
PA:MENTB
The -ette* o" %*ed!t sha-- ,ea* th!s Cont*a%tHs n+$,e* as *e"e*en%e
INSURANCE
To ,e %oe*ed ,y B+ye*Se--e*
Ins+*ed A$o+nt Cond!t!on
INSPECTIONB
OTHER TERMS L CON9ITIONSB
ACCEPTE9 ON ....................0)...
B:B
.............................................MBU:ER)...m.......................MSEGGER)
P-ease s!2n and *et+*n one %o'y.
SEE TERMS AN9 CON9ITIONS ON REDERSE SI9E
1.3to"er 24C1 C3N-R2C-
AENERAG TERMS AN9 C3NDI-I3N1
1W 1.ipment or =e#i&er$ A!ao hQn2
The o,-!2at!ons o" Se--e* to sh!' o* de-!e* the 2oods s'e%!"!ed on the "a%e o" th!s Cont*a%t MKAoodsK)
,y the t!$e o* #!th!n the 'e*!od s'e%!"!ed on the "a%e o" th!s Cont*a%t sha-- ,e s+,Ce%t to the
aa!-a,!-!ty o" the esse- o* the esse-Hs s'a%e. T*R%h nh!`$ %wa ,Nn BRn %h+yVn 2!ao hQn2 STU% 2h!
t*on2 HU' S]n2 M2~! -Q 5hQn2 h_a?) Sin2 hay t*on2 thu! hsn >+y S\nh t*on2 hU' S]n2 ty th+P% Qo
t[nh h[nh th+N tQ+ hay d!`n tj%h %hb hQn2 t*Nn tQ+.
I"1 +nde* the te*$s o" th!s Cont*a%t1 B+ye* !s to se%+*e o* a**an2e "o* the esse- o* esse-Hs s'a%e1
B+ye* sha-- se%+*e o* a**an2e "o* the ne%essa*y esse- o* esse-Hs s'a%e on ,e*th te*$s ,as!s and 2!e
Se--e* sh!''!n2 !nst*+%t!ons #!th!n a *easona,-e t!$e '*!o* to sh!'$ent1 !n%-+d!n2 ,+t not -!$!ted to
the na$e and deta!-ed s%hed+-e o" the esse-. Theo S!v+ .!`n hU' S]n21 nc+ ,Nn M+a -o !`% th+N tQ+
hay $+a %h t*n2 t*Nn tQ+1 th[ 'hX! ,Xo SX$ 2!q %h SV hQn2 sRt thQnh tQ+ Q .hpn2 %hen d! hQn2
h_a %wa n2Tu! .hR%1 S]n2 thu! 'hX! ,Ro %ho ,Nn ,Rn ,!ct %R% %h! t!ct Zn %h+yVn t*on2 .hoXn2 thu!
2!an hU' -e t*Td% .h! %h+yVn hQn21 t*on2 S_ ,ao 2]$ tNn1 -\%h %h! t!ct %wa tQ+ ,!Vn1 J I" B+ye*
"a!-s to 2!e s+%h !nst*+%t!ons #!th!n a *easona,-e t!$e '*!o* to sh!'$ent1 Se--e* $ay1 at !ts so-e
d!s%*et!on and at B+ye*Hs *!s. and a%%o+nt1 a**an2e "o* the esse- o* the esse-Hs s'a%e and $a.e
sh!'$ent o" the Aoods1 #!tho+t '*eC+d!%e and !n add!t!on to any othe* *!2hts and *e$ed!es Se--e* $ay
hae +nde* th!s Cont*a%t o* at -a# o* !n e>+!ty o* othe*#!se. Nc+ ,Nn $+a .hpn2 thpn2 ,Ro %R% thpn2
t!n ya n_! t*on2 thu! hsn hU' -e1 ,Nn ,Rn %_ thV ty n2h!1 Q BNn $+a sW %h\+ $~! *! *o1 %h! 'hj1
th+N tQ+ hay Szt %h t*Nn tQ+ Q Zn %h+yVn hQn21 $Q ,Nn .!a .hpn2 STU% .h!c+ ns! Q S! thN$
>+yvn hsn .hR% SV , SO' $Q theo hU' S]n2 nQy hay theo -+Zt S\nh hay theo tZ' >+Rn1 J. ,Nn ,Rn
%_ thV %_.
T*on2 t*Tun2 hU' %h+yVn 2!ao hQn2 tyn2 'h|n1 ,ft %x t*Tun2 hU' t* nX! hay .hpn2 2!ao $Pt 'h|n
th[ sW .hpn2 ,\ 6e$ -Q ! 'hs$ hU' S]n2 nQy Q .hpn2 STU% s+y *a -Q ,Nn $+a %_ >+yvn hwy hU'
S]n2 hay ty %h! %hf' nhZn toQn ,P nhqn2 -|n 2!ao hQn2 .hR%.
In %ase o" sh!'$ent o* de-!e*y !nsta--$ents1 any de-ay o* "a!-+*e !n sh!'$ent o" one !nsta--$ent sha--
not ,e dee$ed a ,*ea%h o" th!s Cont*a%t 2!!n2 *!se to a *!2ht o" B+ye* to %an%e- th!s Cont*a%t o*
*e"+se to a%%e't 'e*"o*$an%e #!th *es'e%t to othe* !nsta--$ents.
%W +a$ment
I" 'ay$ent "o* the Aoods sha-- ,e $ade ,y a -ette* o" %*ed!t1 B+ye* sha-- esta,-!sh1 !n "ao* o" Se--e*1
an !**eo%a,-e -ette* o" %*ed!t th*o+2h a '*!$e ,an. o" 2ood !nte*nat!ona- *e'+te !$$ed!ate-y a"te*
the %on%-+s!on o" th!s Cont*a%t !n a "o*$ and +'on te*$s sat!s"a%to*y to Se--e*. I" B+ye* "a!-s to $a.e
any d+e 'ay$ent1 to esta,-!sh a -ette* o" %*ed!t o* othe*#!se to 'e*"o*$ !ts o,-!2at!ons he*e+nde*1
Se--e* $ay de$and that B+ye* '*o!de1 #!th!n a *easona,-e t!$e1 ade>+ate ass+*an%e sat!s"a%to*y to
Se--e* o" the d+e 'e*"o*$an%e o" th!s Cont*a%t and $ay de-ay de-!e*y +nt!- s+%h ass+*an%e !s 2!en.
Nc+ thanh toRn STU% tha% h!`n ,hn2 GC1 ,Nn $+a 'hX! $^ GC .hpn2 thV hwy n2an2 $Q ,Nn ,Rn -Q
n2Tu! thr hT^n2 ts! 1 n2n hQn2 hsn2 nhft %_ t!cn2 t*Nn >+% tc n2ay sa+ .h! .e .ct hU' S]n2 nQy
theo h[nh thx% Q S!v+ .!`n Sin2 theo yN+ %|+ %wa ,Nn ,Rn.
Nc+ ,Nn $+a .hpn2 %h\+ thanh toRn Sin2 hsn1 $^ tjn drn2 thT1 hay n_! %R%h .hR%1 tha% h!`n nhqn2
n2ha r dTd! Sy1 ,Nn ,Rn %_ thV yN+ %|+ ,Nn $+a1 t*on2 thu! hsn hU' -e1 %+n2 %f' sa ,Xo SX$ S|y
Sw theo yN+ %|+ %wa ,Nn ,Rn Q ,Nn ,Rn %_ thV hon 2!ao hQn2 %ho Scn .h! nQo ,Nn $+a tha% h!`n
,Xo SX$ thanh toRn nhT S n_!.
B+ye* sha-- 'ay the '*!%e s'e%!"!ed on the "a%e o" th!s Cont*a%t #!tho+t set7o"" %o+nte*%-a!$1
*e%o+'$ent o* othe* s!$!-a* *!2hts #h!%h B+ye* $ay hae a2a!nst Se--e* and #h!%h sha-- ,e e6e*%!sed
!n se'a*ate '*o%eed!n2s ,et#een B+ye* and Se--e*. BNn $+a 'hX! thanh toRn 2!R 2h! %r thV t*Nn hU'
S]n2 nQy .hpn2 STU% t*X 2!R SV thoR! thR%1 hay nhqn2 t*Tun2 hU' tT}n2 ta $Q ,Nn $+a %_ thV tha%
h!`n SV 2y .h_ .hn %ho ,Nn ,Rn1 Q nhqn2 >+yvn nQy ,Nn ,Rn Q ,Nn $+a %h STU% s drn2 t*Td%
.h! .e .ct hU' S]n2 $Q thp!.
Any ne#1 add!t!ona- o* !n%*eased "*e!2ht *ates1 s+*%ha*2es M,+n.e*1 %+**en%y1 %on2est!on o* othe*
s+*%ha*2es)1 ta6es1 %+sto$s d+t!es1 e6'o*t o* !$'o*t s+*%ha*2es o* othe* 2oe*n$enta- %ha*2es1 o*
!ns+*an%e '*e$!+$s1 #h!%h $ay ,e !n%+**ed ,y Se--e* #!th *es'e%t to the Aoods a"te* the
%on%-+s!on o" th!s Cont*a%t sha-- ,e "o* the a%%o+nt o" B+ye* and sha-- ,e *e!$,+*sed to Se--e* ,y
B+ye* on de$and. Nc+ %_ thN$ .hoXn2 tn2 2!R %Td% Zn %h+yVn1 'hr th+ Mr SV hQn21 S! n2os!
t`1 tO% STun2 hay nhqn2 'hr 'hj .hR%)1 th+c1 th+c >+an1 'hr th+ N/ hay %R% -os! -` 'hj S_n2 %ho
%hjnh 'hw1 hay $+a ,Xo h!V$ -!Nn >+an Scn hQn2 h_a1 $Q ,Nn ,Rn 'hX! t*X sa+ .h! %_ hU' S]n2
nQy1 $Q - *a ,Nn $+a 'hX! %h\+ Q 'hX! STU% ,Nn $+a hoQn -s! %ho ,Nn ,Rn theo yN+ %|+.
I" B+ye* "a!-s to 'ay "o* the Aoods !n a%%o*dan%e #!th th!s Cont*a%t1 B+ye* sha-- 'ay to Se--e* as
-!>+!dated da$a2es and not as a 'ena-ty oe*d+e !nte*est at the *ate o" the -o#e* o" e!2hteen 'e*%ent
M18n) 'e* ann+$ o* the $a6!$+$ !nte*est *ate 'e*$!tted ,y the -a#s o" B+ye*Hs %o+nt*y1 %a-%+-ated
"*o$ the date "o* s+%h 'ay$ent +nt!- the a%t+a- date o" 'ay$ent %a-%+-ated on the 4<) day7a7yea*
,as!s "o* the a%t+a- n+$,e* o" days e-a'sed. Nc+ ,Nn $+a .hpn2 thanh toRn theo Sin2 hU' S]n2 nQy1
,Nn $+a 'hX! %h\+ ,]! thTun2 t*Nn %} s^ hU' -e Q .hpn2 STU% 'hst %_ tjnh %hft *n Se hay 'hst
%h!c+ -` theo .!V+ fn S\nh $x% 'hst thf' h}n -! s+ft 18n n$ tjnh t*Nn -! s+ft thanh toRn nU >+R
hsn hay $x% -! s+ft t! Sa $Q -+Zt 'hR' %wa nTd% n2Tu! $+a %ho 'h{'1 tjnh .V ty n2Qy 'hX! thanh
toRn %ho Scn n2Qy tha% sa thanh toRn theo n$ -\%h 4<) n2Qy SV ,!ct s n2Qy tha% tc >+R hsn thanh
toRn.
*W (ore Male9re
I" the 'e*"o*$an%e ,y Se--e* o" !ts o,-!2at!ons he*e+nde* !s d!*e%t-y o* !nd!*e%t-y a""e%ted o*
'*eented ,y "o*%e $aCe+*e1 !n%-+d!n2 ,+t not -!$!ted to A%ts o" Aod1 "-ood1 ty'hoon1 ea*th>+a.e1
t!da- #ae1 -ands-!de1 "!*e1 '-a2+e1 e'!de$!%1 >+a*ant!ne *est*!%t!on1 'e*!-s o" the sea1 #a* de%-a*ed o*
not o* th*eat o" the sa$e %!!- %o$$ot!on1 ,-o%.ade1 a**est o* *est*a!nt o" 2oe*n$ent1 *+-e*s o* othe*
-a,o* d!s'+te1 e6'-os!on1 a%%!dent o* ,*ea.do#n !n #ho-e o* !n 'a*t o" $a%h!ne*y1 '-ant1
t*ans'o*tat!on o* -oad!n2 "a%!-!ty1 2oe*n$enta- *e>+est1 2+!dan%e1 o*de* o* *e2+-at!on1 +naa!-a,!-!ty
o" t*ans'o*tat!on o* -oad!n2 "a%!-!ty1 ,an.*+'t%y o* !nso-en%y o" the $an+"a%t+*e* o* s+''-!e* o" the
Aoods1 o* any othe* %a+ses o* %!*%+$stan%es #hatsoee* ,eyond the *easona,-e %ont*o- o" Se--e* o*
$an+"a%t+*e* o* s+''-!e* o" the Aoods1 then Se--e* sha-- not ,e -!a,-e "o* -oss o* da$a2e1 o* "a!-+*e o"
o* de-ay !n 'e*"o*$!n2 !ts o,-!2at!ons +nde* th!s Cont*a%t and $ay1 at !ts o't!on1 e6tend the t!$e o"
sh!'$ent o* de-!e*y o" the Aoods o* te*$!nate +n%ond!t!ona--y and #!tho+t -!a,!-!ty the +n"+-"!--ed
'o*t!on o" th!s Cont*a%t to the e6tent so a""e%ted o* '*eented.
4W Defa9#t
Be%a+se S D J
Be%a+se o" No+n 'h*ase
Be%a+se the %ons!2n$ent #as de-ayed1 the se--e* had to ,e -!a,-e "o* %o$'ensat!on.
Be%a+se o" the de-ayed %ons!2n$ent1 the se--e* had to ,e -!a,-e "o* %o$'ensat!on.
In %ase that the %ons!2n$ent #as de-ayed1 the se--e* #o+-d ,e -!a,-e "o* %o$'ensat!on.
In %ase o" the de-ayed %ons!2n$ent1 the se--e* had to ,e -!a,-e "o* %o$'ensat!on.
In %ase o" M!) B+ye*Hs "a!-+*e to 'e*"o*$ any '*o!s!on o" th!s Cont*a%tm M!!) B+ye*Hs !na,!-!ty to 'ay !ts
de,ts 2ene*a--y as they ,e%o$e d+em M!!!) B+ye*Hs ,an.*+'t%y o* !nso-en%y o* M!) a''o!nt$ent o" a
t*+stee1 *e%e!e* o* -!>+!dato* o" B+ye* o" any $ate*!a- 'a*t o" B+ye*Hs assets o* '*o'e*t!es MKEents o"
9e"a+-tK)1 Se--e* $ay1 at !ts so-e d!s%*et!on1 M!) te*$!nate th!s Cont*a%t o* any 'a*t the*eo"m M!!) de%-a*e
a-- o,-!2at!ons o" B+ye* !$$ed!ate-y d+e and 'aya,-em M!!!) *ese-- the Aoodsm M!) ho-d the Aoods "o*
B+ye*Hs a%%o+nt and *!s.m M) 'os'one the sh!'$ent o" Aoodsm o* M!) sto' the Aoods !n t*ans!t1 and
B+ye* sha-- *e!$,+*se Se--e* "o* a-- -osses1 da$a2es a*!s!n2 d!*e%t-y o* !nd!*e%t-y "*o$ s+%h Eents o"
9e"a+-t.
The *!2hts and *e$ed!es o" Se--e* he*e+nde* a*e %+$+-at!e and !n add!t!on to Se--e*Hs *!2hts1 'o#e*s
and *e$ed!es e6!st!n2 at -a# o* !n e>+!ty o* othe*#!se.
'W Inte##et9a# propert$ rig.ts
Noth!n2 he*e!n %onta!ned sha-- ,e %onst*+ed as t*ans"e**!n2 any 'atent1 t*ade$a*.1 +t!-!ty $ode-1
des!2n1 %o'y*!2ht1 $as. #o*d o* any othe* !nte--e%t+a- '*o'e*ty *!2hts !n the Aoods1 as s+%h *!2hts
,e!n2 e6'*ess-y *ese*ed to the t*+e and -a#"+- o#ne*s the*eo".
Se--e* sha-- ,e ne!the* *es'ons!,-e no* -!a,-e "o* any !n"*!n2e$ent o* +na+tho*!Eed +se #!th *e2a*d to
any 'atent1 t*ade$a*.1 +t!-!ty $ode-1 des!2n1 %o'y*!2ht1 $as. #o*. o* any othe* !nte--e%t+a- '*o'e*ty
*!2hts.
,W :arrant$, #aim
Un-ess e6'*ess-y st!'+-ated on the "a%e o" th!s %ont*a%t1 se--e* $a.es no #a**anty o* %ond!t!on1
e6'*ess-y o* !$'-!ed-y1 Has to the "!tness o* s+!ta,!-!ty o" the 2oods "o* any 'a*t!%+-a* '+*'ose o* +se
o* the $e*%hanta,!-!ty the*eo".
I" any #a**anty e6!sts. Se--e*Hs -!a,!-!ty sha-- ,e -!$!ted to *e'-a%e$ent o* *e'a!* o" the de"e%t!e
Aoods.
Any %-a!$ ,y B+ye* o" #hatee* nat+*e a*!s!n2 +nde* o* !n *e-at!on to th!s Cont*a%t sha-- ,e $ade ,y
*e2!ste*ed a!*$a!- #!th!n th!*ty M4)) days a"te* the a**!a- o" the Aoods at the 'o*t o" dest!nat!on1 o*
so-e-y !n *es'e%t to a %-a!$ a--e2!n2 the e6!sten%e o" a -atent de"e%t !n the Aoods1 #!th!n s!6 M<)
$onths a"te* the a**!a- o" the Aoods at the 'o*t o" dest!nat!on1 and any s+%h %-a!$ sha-- %onta!n "+--
'a*t!%+-a*s #!th e!den%e %e*t!"!ed ,y an a+tho*!Eed s+*eyo*.
6W Limitation
Se--e* sha-- not ,e *es'ons!,-e1 #hethe* !n %ont*a%t o* #a**anty1 to*t o* on any othe* ,as!s1 to B+ye*
"o* any s'e%!a-1 !n%!denta-1 %onse>+ent!a-1 !nd!*e%t o* e6e$'-a*y da$a2es1 and !n no eent sha--
Se--e*Hs tota- -!a,!-!ty on any o* a-- %-a!$s "*o$ B+ye* e6%eed the '*!%e o" the Aoods.
8W <enera#
M1) A-- d!s'+tes1 %ont*oe*s!es o* d!""e*en%es a*!s!n2 o+t o" o* !n *e-at!on to th!s Cont*a%t o* the
,*ea%h the*eo" #h!%h %annot ,e sett-ed ,y $+t+a- a%%o*d #!tho+t +nd+e de-ay sha-- ,e sett-ed ,y
a*,!t*at!on !n To.yo1 Ja'an1 !n a%%o*dan%e #!th the *+-es o" '*o%ed+*e o" the Ja'an Co$$e*%!a-
A*,!t*at!on Asso%!at!onm the a#a*d o" a*,!t*at!on sha-- ,e "!na- and ,!nd!n2 +'on ,oth 'a*t!es1 and
C+d2$ent on s+%-! a#a*d $ay ,e ente*ed !n any %o+*t o* t*!,+na- ha!n2 C+*!sd!%t!on the*eo"m th!s
Cont*a%t sha-- ,e1 !n a-- *es'e%ts1 2oe*ned ,y and %onst*+ed !n a%%o*dan%e #!th the -a#s o" Ja'anm
the t*ade te*$s he*e!n +sed1 s+%h as ;OB1 C;R and CI;1 sha-- ,e !nte*'*eted !n a%%o*dan%e #!th
KINCOTERMS 0)))K.
M0) The "a!-+*e o" Se--e* at any t!$e to *e>+!*e "+-- 'e*"o*$an%e ,y B+ye* o" the te*$s he*eo" 7sha--
not a""e%t the *!2ht o" Se--e* to en"o*%e the sa$em the #a!e* ,y Se--e* o" any ,*ea%h o" any '*o!s!on
o" th!s Cont*a%t sha-- not ,e %onst*+ed as a #a!e* o" any s+%%eed!n2 ,*ea%h o" s+%h '*o!s!on o*
#a!e* o" the '*o!s!on !tse-".
M4) Th!s Cont*a%t %onst!t+tes the ent!*e a2*ee$ent ,et#een the 'a*t!es he*eto and s+'e*sedes a-- '*!o*
o* %onte$'o*aneo+s %o$$+n!%at!ons1 a2*ee$ents o* +nde*ta.!n2s #!th *e2a*d to the s+,Ce%t $atte*
he*eo"m th!s Cont*a%t $ay not ,e $od!"!ed o* te*$!nated e6%e't ,y a #*!tten a2*ee$ent o" Se--e* and
B+ye*.
M8) B+ye* sha-- not t*ans"e* o* ass!2n th!s Cont*a%t o* any 'a*t the*eo" #!tho+t Se--e*Hs '*!o* #*!tten
%onsent.
'.' THE FI7E STEPS IN NEGOTIATING PA8MENT
THE PROBLEM
;o* the e6'o*te*1 the 2*eat "ea* !s non7'ay$ent. Most dee-o'ed %o+nt*!es o""e* e6'o*t7!ns+*an%e1 to
%oe* th!s and othe* *!s.s1 ,+t s+%h !ns+*an%e !s *a*e !n dee-o'!n2 %o+nt*!es. Ho# %an the e6'o*te*
%*eate 'ay$ent te*$s that ens+*e 'ay$ent&
THE PRINCIPLE
Pay$ent !s a $o*e o*de*-y '*o%ess than de-!e*y.
Ee*y s+%%ess"+- 'ay$ent '*o!s!on st!'+-ates
the "-o#B When and Whe*e o" 'ay$ent. In
add!t!on !t s'e%!"!es #hat de-ay !n 'ay$ent1 !"
any1 !s e6%+sa,-e1 and the %onse>+en%es o"
+ne6%+sa,!e de-ay.
Thanh toRn %|n 'hX! t!cn hQnh theo Sin2 t*[nh ta
h}n 2!ao hQn2.
Tft %X %R% >+y S\nh v thanh toRn %|n 'hX! nN+ *
%h! t!ctB Thu! 2!an Q S!V$ thanh toRn. N2oQ! *a
%n2 %|n 'hX! 2h! %r thV .hX nn2 thanh toRn t*1
nhqn2 t*Tun2 hU' nQo STU% $!n t*y t*R%h
nh!`$1 Q .hpn2 $!n t*y t*R%h nh!`$.
IN MORE DEPTH
In ne2ot!at!n2 'ay$ent1 the s6'o*te* sho+-d .ee' "!e Ste's !n $!nd1 "!e !ss+es that the e6'o*t
a2*ee$ent $+st ade>+ate-y %oe*.
1-E+ 1
MO9E O; PA:MENT
Ho# #!-- 'ay$ent ,e
1-E+ %
TIMINA
What !s the
date o"
1-E+ *
PGACE O;
PA:MENT
Whe*e $+st the
$oney ,e ,e"o*e
1-E+ 4
9EGA:
What de-ay
!n 'ay$ent
!s
e6%+sa,-e&
1-E+ '
RESUGT O;
9EGA:
What a*e the
*es+-ts o" non7
e6%+sa,-e de-ay
!n 'ay$ent
$ade 'ay$ent& 'ay$ent !s
%ons!de*ed
%o$'-ete&
1tep 1. Mo=e of +a$ment
Most !nte*nat!ona- t*ade !s %ond+%ted on a %ash ,as!sl2oods a2a!nst %ash. So$et!$es1
ho#ee*1 2oods a*e t*aded a2a!nst 2oods M,a*te* t*ade)1 and so$et!$es the e6'o*te* 2!es the
,+ye* a %*ed!tlthe ,+ye* %an 'ay ,y !nsta--$ents oe* a 'e*!od o" t!$e. Ba*te* and %*ed!t
t*ansa%t!ons a*e a s+,Ce%t !n the$se-es. He*e #e sha-- -oo. on-y at %ash t*ansa%t!ons.
T*ade "it*in a %o+nt*y !s ,ased on a $!6t+*e o" t*+st and the %-ose '*o6!$!ty o" %o+*ts o" -a#.
Inte*nat!ona- ,+s!ness !s not so ,-essedB t*+st !s *a*e1 and %o+*ts a*e "a* a#ay and
+n'*ed!%ta,-e. Pay$ent !s. the*e"o*e1 t!2ht-y %ont*o--ed. ;o+* a''*oa%hes to 'ay$ent a*e
%o$$onB
o Pay$ent on o'en a%%o+nt #!th no se%+*!tym
o Pay$ent on o'en a%%o+nt se%+*ed ,y e6'o*t %*ed!t !ns+*an%em
o Pay$ent on o'en a%%o+nt se%+*ed ,y a 'ay$ent 2+a*anteem and
o Pay$ent ,y -ette* o" %*ed!t.
In '*!ate -!"e1 s$a-- '+*%hases M!n a s+'e*$a*.et1 "o* e6a$'-e) a*e so-d cas* on +elivery. I"
yo+ ,+y ho+seho-d "+*n!t+*e1 yo+ #!-- +s+a--y *e%e!e the !no!%e #!th a %e*ta!n a$o+nt o"
t!$e to 'ay !tlcas* a$ainst invoice. Cash a2a!nst !no!%e !s the ty'!%a- open acco!nt
t*ansa%t!on. I"1 ho#ee*1 the "+*n!t+*e sto*e d!st*+sts yo+1 !t #!-- as. "o* a 1))n '*e'ay$ent
as se%+*!tylcas* "it* or+er- that #ay they a*e %o$'-ete-y sa"e.
A-- these t*ansa%t!ons hae e6a%t e>+!a-ents !n e6'o*t t*ade. O,!o+s-y1 ho#ee*1 the #o*d
K%ashK !n the !nte*nat!ona- %onte6t does not +s+a--y $ean %o!ns and notes. MO%%as!ona--y1
'e*ha's1 a ,+ye* 'ays "o* 2oods ,y 2!!n2 the e6'o*te* a ,*!e"%ase "+-- o" $oney1 ,+t s+%h
'ay$ents 2ene*a--y *e"-e%t a #!sh to es%a'e s%*+t!ny ,y the %ent*a- ,an. o* othe* a+tho*!t!es.)
To the e6'o*te* %ash no*$a--y $eans %he%.s M%he>+es) o* ,an. t*ans"e*s.
E6'o*te*s #ho a*e 'a!d on o'en a%%o+nt a*e se*!o+s-y at *!s.. The '*o,-e$ !s o,!o+sB !"
anyth!n2 2oes #*on2l!" the %he%. !s not hono*ed ,y the ,an. "o* e6a$'-e1 o* !" the ,+ye*
"!-es "o* ,an.*+'t%y o* s!$'-y d!sa''ea*slthe e6'o*te* !s !n a 'oo* 'os!t!on to %-a!$
'ay$ent. One so-+t!on !s to as. "o* 1))n '*e'ay$entlas !n the "+*n!t+*e sto*e e6a$'-e
a,oe. The ,+ye*1 ho#ee*1 !s +n-!.e-y to a2*ee to th!s a**an2e$ent.
The*e a*e t#o %o$$on a''*oa%hes to '*o!d!n2 the e6'o*te* #!th an a%%e'ta,-e -ee- o"
se%+*!tyB one a''*oa%h !s to 'e*s+ade a th!*d 'a*ty to 'ay the e'6o*te* !" the ,+ye* "a!-s to do
so. A ty'!%a- th!*d 'a*ty !s a ,an. #h!%h $ay !ss+e a ,an. 2+a*antee1 'a!d "o* ,y the ,+ye*.
An a-te*nat!e th!*d 'a*ty !s an !ns+*an%e that !ss+es an e6'o*t %*ed!t !ns+*an%e 'o-!%y
%oe*!n2 the *!s. o" non7'ay$entB !n th!s %ase1 the e6'o*te* 'ays the %osts. The se%ond
a''*oa%h !s to 'os!t!on the $oney the $oney #!th a ,an. !n the %o+nt*y o" the 6'o*te* ,y
$eans o" -ette* o" %*ed!t1 and to a--o# the e6'o*te* %o--e%t the $oney #hen the 2oods a*e
de-!e*ed. The -ette* o" 2+a*antee1 e6'o*t %*ed!t !ns+*an%e1 and the -ette* o" %*ed!t ea%h o"
these a''*oa%hes !s %o$'-e6 eno+2h to *e>+!*e a se%t!on !n !ts o#n *!2ht.
1tep %. -iming
In ne2ot!at!n2 any %ash7a2a!nst7!no!%e 'ay$ent7 #hethe* se%+*ed o* not7 !t !s !$'o*tant to
%ons!de* the t!$e'ay$ent st*+%t+*e. Pay$ent a2a!nst !no!%e !s *a*e-y $ade !$$ed!ate-y.
Most ,+ye*s #a!t a #h!-e ,e"o*e 'ay!n2B the de-ay 2!es the$ +se o" #hat !s1 !n "a%t1 the
e6'o*te*3s $oney. The e6'o*te*1 o" %o+*se1 s+""e*s "*o$ de-ayB he $+st ,o**o# $oney1
'e*ha's at a h!2h *ate o" !nte*est1 +nt!- he !s 'a!d. To s'eed +' 'ay$ent1 $ost e6'o*te*s o""e* a
d!s%o+nt "o* ea*-y 'ay$ent1 "o* e6a$'-e 1n d!s%o+nt !" 'ay$ent !s $ade #!th!n 4) days o"
the date o" !no!%e. Th!s d!s%o+nt !s o"ten att*a%t!e "o* ,oth ,+ye* and e6'o*te*B the ,+ye*
saes on the !no!%e '*!%e1 #h!-e the e6'o*te* s+,stant!a--y1 !$'*oes h!s %ash "-o#. I" the
'a*t!es say noth!n2 at a--1 then 'ay$ent !s d+e1 !n $ost C+*!sd!%t!ons on de-!e*y.
The date o" 'ay$ent "o* a s!n2-e sa-e !s s!$'-y *e2+a-ated. In an on2o!n2 %ont*a%t7 de-!e*y
!no-!n2 'a*t!a- sh!'$ents1 'e*!od!% sh!'$ents1 o* a s'a*e 'a*ts s+''-y %ont*a%t1 "o*
e6a$'-e7 the a'*t!es $+st ne2ot!ate a %ha!n o" dates. These a*e %a-enda* dates M"o* e6a$'-e1
4)
th
J+ne) o* !nte*a- t!$es M"o* e6a$'-e1 #!th!n 4) days o" the date o" !no!%e).
1tep *. +#ae of +a$ment
When Tony M!no !nst*+%ts h!s ,an. !n ;.s'e*anEa to 'ay 9o+,-e7A Gtd. !n De*,ena1 he ,e2!ns
a %ha!n o" eents that o"ten ta.es $onths to %o$'-ete. Pe*ha's the Nat!ona- Ban. o"
Es'e*anEa has no "+nds to $a.e "o*e!2n t*ans"e*sm 'e*ha's !ne""!%!en%y de-ays 'ay$ent. To
ao!d the dan2e*s o" s-o# 'ay$ent1 e6'o*te*s t*y to '*ote%t the$se-es #!th a %-a+se -!.e th!sB
Pay$ent sha-- ,e dee$ed to hae ,een $ade on-y #hen the %ont*a%t !s 'a!d !nto the
se--e*3s ,an. a%%o+nt and !s at the se--e*3s "+-- d!s'osa-.
In "a%t1 th!s !s not +n*easona,-eB +nde* the D!enna Sa-es Conent!on1 "o* e6a$'-e1 'ay$ent !s
no*$a--y dee$ed to ,e $ade on- #hen the %ash !s aa!-a,-e at Kthe se--e*Hs '-a%e o" ,+s!nessK
MA*t!%-e (=) Ne2ot!ato*s $+st #o*. th!s o+t %a*e"+--y 7the %on"-!%ts o" !nte*est a*e %-ea*B
POINT AT WHICH MONE: IS 9EEME9 TO BE PAI9
When the ,+ye*
!nst*+%ts the ,an. to
'ay&
When the ,+ye* 'ays
the $oney !nto h!s
,an. &
When the ,+ye*3s ,an.
t*ans"e*s "+nds&
When "+nds *ea%h the
se--e*3s ,an. a%%o+nt&
BU:ER PRE;ERS SEGGER PRE;ERS
The de%!s!on !s !$'o*tant ,e%a+se -ate 'ay$ent !s s+,Ce%t to 'ay$ent o" !nte*estB the %ost o"
any de-ay a-on2 the 'ay$ent *o+te '*o'e*-y ,e-on2s to the ,+ye*.
1tep 4. De#a$
As #!th de-!e*y1 de-ay !n 'ay$ent $!2ht ,e e6%+sed d+*!n2 a 2*a%e 'e*!od1 tho+2h th!s !s
+n+s+a-. Mo*e %o$$on-y1 a "o*%e $aCe+*e eent e6%+ses de-ay. In "a%t1 the "o*%e $aCe+*e
e6%+se "o* de-ay se-do$ $a.es sense !n the %onte6t o" 'ay$entm $ost e6'o*te*s t*y to *es!st
!t. In '*!n%!'-e1 any 'ay$ent $ade a"te* the a2*eed date o" 'ay$ent !s !n de-ay.
1tep '. Res9#ts of De#a$.
What ha''ens #hen 'ay$ent !s -ate& It !s 2ene*a--y a2*eed !n $ost -e2a- syste$s that the
e6'o*te* has a *!2ht to ,e %o$'ensated "o* -osses d+e to -ate 'ay$ent. What ha''ens !n
'*a%t!%e de'ends on the 'ay$ent a2*ee$ent ne2ot!ated ,y the 'a*t!es. GetHs sta*t #!th the
#o*st %aseB 'ay$ent on o'en a%%o+nt1 #!th no se%+*!ty and #!th no a2*ee$ent on -ate
'ay$ent. In th!s %ase1 the e6'o*te* t*!es to e6e*t '*ess+*e on the ,+ye*l ,+t th!s !s d!""!%+-t.
The e6'o*te* #*!tes -ette*s1 $a.es te-e'hone %a--s1 #a!ts and ho'es. Ee*y day that 'ay$ent
!s -ate %osts $oneyl-osses that the e6'o*te* %an1 !n '*a%t!%e1 do -!tt-e a,o+tl#!tho+t
,e2!nn!n2 -e2a- a%t!on. Cons!de*a,-y ,ette* !s the s!t+at!on o" the e6'o*te* #hose %ont*a%t
#!th the ,+ye* *e2+-ates -ate 'ay$ent. A ty'!%a- %ont*a%t %-a+seB
9e-ayed Pay$ent
I" 'ay$ent o" any s+$ 'aya,-e !s de-ayed1 the B+ye* sha-- ,e ent!t-ed to *e%e!e !nte*est on
the a$o+nt +n'a!d d+*!n2 the 'e*!od o" de-ay. The !nte*est sha-- ,e at an ann+a- *ate th*ee
'e*%enta2e 'o!nts a,oe the d!s%o+nt *ate o" the %ent*a- ,an. !n the Se--e*Hs %o+nt *y.
When the e6'o*te* !s "!na--y 'a!d1 the !nte*est 'aya,-e !s s!$'-y added to the o+tstand!n2 s+$.
;o* "o*%e $aCe+*e1 se% Cha'te* 11 Se%t!on 0. The "o*%e $aCe+*e %-a+se s+22ested ,y the
Inte*nat!ona- Cha$,e* o" Co$$e*%e1 "o* e6a$'-e1 states that 'ay$ent o" !nte*est on oe*d+e
s+$s 'aya,-e to the se--e* !s not e6%+sed ,y "o*%e $aCe+*e.
Een ,ette* "o* the e6'o*te* !s an a2*ee$ent #!th the ,+ye* to st*en2then the 'ay$ent
'*o!s!ons #!th a 'ay$ent 2+a*antee. Th!s 2+a*antee1 as yo+ #!-- see !n Se%t!on 4 ,e-o#1
o,-!2es a ,an. to 'ay !" the ,+ye* !s $o*e than a 2!en t!$e1 say t#o $onths1 !n de-ay.
The ,est so-+t!on1 o" %o+*se1 !s to %*eate a 'ay$ent *e2+-at!on #h!%h $a.es -ate 'ay$ent
!$'oss!,-elthe %on"!*$ed1 !**eo%a,-e1 at7s!2ht -ette* o" %*ed!t. Noth!n2 !s ,ette* "o* the
e6'o*te*.
What :o+ Sho+-d /no#
1. Pay$ent sho+-d ,e ne2ot!ated so that the e6'o*te* se%+*es '*o$'t1 %o**e%t 'ay$ent.
0. Pay$ent on o'en a%%o+nt !s o"ten t!$ed so that ea*-y 'ay$ent se%+*es a d!s%o+nt "o* the ,+ye*m
th!s ,ene"!ts the e6'o*te* ,y !$'*o!n2 %ash "-o#.
4. The e6'o*te* '*e"e*s the '-a%e o" 'ay$ent to ,e h!s o#n ,an. a%%o+ntm 'ay$ent !s not dee$ed to
,e $ade +nt!- the $oney !s at h!s d!s'osa-.
8. In $ost %ont*a%ts noth!n21 not een "o*%e $aCe+*e1 e6%+ses -ate 'ay$ent.
(. Gate 'ay$ent %a+ses ha*$ to the e6'o*te*lthe ,an. !nte*est he $+st 'ay #h!-e #a!t!n2 ;o* h!s
$oney. Th!s !nte*est sho+-d ,e %o$'ensated to h!$ ,y the ,+ye* +nde* the te*$s o" the %ont*a%t.
C21E 1-0D7
Missing -erms
St+dy the '*!%e and 'ay$ent %-a+se ,e-o#. It !s ta.en "*o$ an e6'o*t %ont*a%t that -ost the e6'o*te* a
2*eat dea- o" $oney. What !s $!ss!n2&
The '*!%e 'aya,-e "o* the Cont*a%t Aoods as s'e%d!"!ed !n Anne6 A !s k8))1))).
1. 9oes the %-a+se s'e%!"y ho# 'ay$ent #!-- ,e $ade& :ES NO
0. 9oes the %-a+se s'e%!"y #hen 'ay$ent !s d+e& :ES NO
4. 9oes the %-a+se say #he*e the $oney $+st ,e ,e"o*e the ,+ye* !s dee$ed to hae 'a!d&
:ES NO
8. 9oes the %-a+se de"!ne de-ay !n 'ay$ent& :ES NO
(. 9oes the %-a+se $ent!on the %onse>+en%es o" de-ay& :ES NO
<. What !s 'ay$ent d+e !" the 'a*t!es say noth!n2 !n the!* a2*ee$ent&
The ans#e* to >+est!ons 17( !s 5No.? A %ont*a%t -!.e th!s *e-!es hea!-y on the a''-!%a,-e -a#
to "!-- !n the 2a'sB the e6'o*te* o"ten "!nds h!$se-" e*y +nha''y #!th the de%!s!ons that the
-a# $a.es.
Q+est!on <B I" the 'a*t!es say noth!n21 'ay$ent !s +s+a--y d+e on de-!e*y.
CONCEPT REDIEW
Be-o# !s the "!*st 'a*t o" a 'ay$ent 2+a*antee !ss+ed !n standa*d ,an. "o*$. St+dy !t1 and then
ans#e* the >+est!ons.
Pay$ent A+a*antee No. =<(80@0
Re"e*en%e !s $ade to the o*de* No. WE 488 / '-a%ed #!th yo+ as s+''-!e*s ,y M+-t!7
I$'o*t "o* the s+''-y o" !nte2*ated %!*%+!ts.
A%%o*d!n2 to the %ond!t!ons o" th!s o*de*1 the B+ye* has to "+*n!sh a 'ay$ent 2+a*antee !n
the a$o+nt o" US9 ())1))).
By o*de* o" the B+ye*1 #e1 B!2 Ban. o" E+*o-and1 he*e,y esta,-!sh th!s 2+a*antee and
+nde*ta.e !**eo%a,-y to 'ay to yo+ #!tho+t *e>+est o* !ns'e%t!on any o+tstand!n2 a$o+nt
not e6%eed!n2 US9 <))1)).
We say Un!ted States 9o--a* s!6 h+nd*ed tho+sand on-y +'on yo+* "!*st #*!tten de$and
stat!n2 that the B+ye* has "a!-ed to e""e%t the o+tstand!n2 'ay$ent at $at+*!ty.
O+* -!a,!-!ty +nde* th!s 2+a*antee #!-- e6'!*e as soon as th!s do%+$ent !s *et+*ned to +s1
-atest ho#ee*1 ,y 41
st
9e%e$,e* 0))<.
AI: BO M THANH TON S =<(80 @0
A!fy ,Xo SX$ nQy STU% 'hRt hQnh %n %x Qo S}n Szt hQn2 s WE 488 / S 2! %ho >+e
N2Q!1 $Q M+-t!7I$'o*t -Q nhQ %+n2 %f' ! $s%h %ho thn %hw %wa %hin2 tp!.
Theo %R% S!v+ .!`n %wa S}n Szt hQn2 nQy1 ,Nn $+a 'hX! %+n2 %f' 2!fy ,Xo SX$ thanh toRn
%_ 2!R t*\ ())1))) US9. Theo -`nh %wa ,Nn $+a1 n2n hQn2 B!2 Ban. o" E+*o-and %wa
%hin2 tp! nay 'hRt hQnh 2!fy ,Xo SX$ nQy Q SX$ t*R%h .hpn2 STU% thoR! thR% !`% thanh
toRn %ho >+e n2Q! S! d! ,ft %x .hoXn t!vn SRo hsn .hpn2 TUt >+R <)) US9 $Q .hpn2
STU% thO% $O% hay t[$ %d t*[ hon.
Cr thV n ,Xn yN+ %|+ S|+ t!Nn thanh toRn s t!vn sR+ t*$ n2Qn US9 'hX! nN+ * ,Nn $+a
S .hpn2 tha% h!`n thanh toRn .h! SRo hsn. T+y nh!Nn 2!fy ,Xo SX$ nQy sW hct h!`+ -a%
n2ay .h! %hxn2 ty nQy STU% t*X -s! %ho %hin2 tp! %hZ$ nhft -Q n2Qy 41100))<.
1. Who !s the '*!n%!'a-& SEGGER BU:ER BAN/
0. Who !s the 2+a*anto*& SEGGER BU:ER BAN/
4. Who !s the ,ene"!%!a*y& SEGGER BU:ER BAN/
8. Is th!s a 5de$and? 2+a*antee& :ES NO
(. I" the ,+ye* "a!-s to 'ay1 !s 'ay$ent se%+*e& :ES NO
1. The ,+ye* MM+-t!7!$'o*t) 0. The ,an. MB!2 Ban. o" E+*o-and)
4. The e6'o*te* M+nna$ed) 8. :es (. :es
-rans#ate into >ietnamese
A E6a$'-e 8.
CONTRACT ;OR AARMENT PROCESSINA
AENERAG TERMS
AN9 CON9ITIONS
ON BASIS O; C.M.P.
NoB )8AEN7EGGEN1@ ..
+art$ 2: DIETNAM NATIONAG AENERAG
EPORT7
IMPORT CORPORATION
MAENERAGEIM)
8<1 N2o Q+yen St*eet
Hano!1 S.R o" D!etna$
He*e!na"te* %a--ed
KPa*ty AK
+art$ 4: EGGEN CO. GT9
1()8 7 1(1) Sta* Ho+se1
Sa-!s,+*y Road1 /o#-oon1 Hon2.on2
He*e!na"te* %a--ed
KPa*ty BK
HP NA AIA CNA MA: MC
2. -.e Contrat
1. Pa*ty A +nde*ta.es to $an+"a%t+*e the
2a*$ents s'e%!"!ed !n the se'a*ate %ont*a%t o*
a''end!6 o" the %ont*a%t Mto ,e) s!2ned ,y ,oth
the 'a*t!es !n a%%o*dan%e #!th the '*esent 2ene*a-
te*$s and %ond!t!ons a-so "o* the de-!e*y t!$e
stated !n the a,oe $ent!oned %ont*a%t o* !ts
a''end!6.
A. HU' S]n2
1. BNn A %h\+ t*R%h nh!`$ sXn 6+ft hQn2 $ay
$z% STU% 2h! * t*on2 1 hU' S]n2 *!Nn2 hay 'hr
-r% %wa hU' S]n2 do 0 ,Nn .e .ct theo Sin2 %R%
S!v+ .hoXn Q S!v+ .!`n %h+n21 t*on2 S_ %_ fn
S\nh thu! 2!an 2!ao hQn2.
0. Pa*ty A sha-- ,e *es'ons!,-e "o* the de-!e*y
t!$e '*o!ded that a-- $ate*!a-s and a%%esso*!es
to ,e s+''-!ed ,y 'a*ty B a**!e at Ha!'hon2 'o*t
!n *easona,-e t!$e '*!o* to sta*t!n2 '*od+%t!on o"
a ne# sty-e
4. Any "a%to*!es to ,e +sed "o* '*od+%t!on o"
o*de*s ,y Pa*ty A sha-- ,e a''*oeda%%e'ted ,y
Te%hn!%!ans "*o$ Ste!-$ann.
4. Materia# s9pp#$
1. Pa*ty B and Ste!-$ann #!-- ,e *es'ons!,-e "o* s+''-y!n2 a-- the "a,*!% $ate*!a-s Mshe-- -!n!n2
A%*y-!% Boa 'o%.et!n2 -!n!n2) and a%%esso*!es !n d+e t!$e "o* sta*t!n2 '*od+%t!on to2ethe* #!th the
"o--o#!n2 e6t*a !te$sB
7 ;a,*!% $ate*!a-s 0n
7 !''e*1 sho+-de* 'ad and s'e%!a- -a,e- 1.)n
7 ;+s!n2 0n
7 B+ttons1 eye-et1 sto''e* and 'add!n2 4.)n
7 S!Ee -a,e-1 Han2ta2s1 th*ead (.)n
7 Othe*s !te$s not $ent!oned a,oe and the #asta2e #!-- ,e %on"!*$ed -ate*.
A-- the a,oe7$ent!oned "a,*!% $ate*!a-Hs and a%%esso*!esH #asta2e a*e on-y "o* *e'-a%e$ent o" any
de"e%t!e !te$s. A"te* the "a%to*y "+-"!-s a-- the o*de*s and >+ant!ty1 these #asta2e 'e*%enta2es %an ,e
*eta!ned ,y the "a%to*y.
0. Pa*ty B sha-- ,e *es'ons!,-e "o* send!n2 the !$'o*t do%+$ents 4 days ,e"o*e esse- %a**y!n2 the
2oods *e"e**ed to !n A4 he*eo" ETAm as soon as the $ate*!a-sa%%esso*!es hae a**!ed !n the 'o*t1 'a*t
A sha-- ,e *es'ons!,-e "o* a''-y!n2 "o* the !$'o*t7-!%ense the ta67"*ee 'e*$!t1 and ta.e the 2oods o+t
o" C+sto$s to the "a%to*y #!th!n 1) days
4. A"te* the a**!a- o" the $ate*!a-s !n Pa*ty AHs "a%to*!es1 the "a%to*!es sho+-d !n"o*$ Pa*ty B and
then ,oth 'a*t!es sha-- Co!nt-y %he%. the %ontents o" ea%h %a*ton and ,a-e #!th!n one #ee. and sha--
'*e'a*e the Che%.!n2 Re'o*t 7 #h!%h sho+-d ,e s!2ned ,y ,oth 'a*t!es and 'assed to Pa*ty B
!$$ed!ate-y.
8. Pa*ty A sha-- ,e *es'ons!,-e "o* the "a,*!%s and a%%esso*!es "*o$ the date o" *e%e!'t +nt!- the date o"
sh!'$ent and sha-- %o$'ensate 'a*ty B the "+-- !no!%e a-+e "o* any -oss o* da$a2e M;o*%e $aCe+*e
e6%e'ted)
C. 1e)ing instr9tion an= inspetion
1. Pa*ty B #!-- s+''-y the o*!2!na- sa$'-es1 s.et%hes1 se#!n2 !nst*+%t!ons and 'a'e* 'atte*ns to 'a*ty
AHs "a%to*!es "*o$ ( to = days ,e"o*e Pa*ty A sta*ts '*od+%t!on o" ea%h sty-eo*de* ena,-!n2 the
"a%to*!es to $a.e a sa$'-e.
0. Pa*ty AHs "a%to*!es sho+-d $a.e 4 %o+nte* sa$'-es ,ased on s+''-y !nst*+%t!on and 'a'e* 'atte*n
and send "o* Pa*ty BHs te%hn!%!an to ea-+ate.
4. Pa*ty AHs "a%to*!es sho+-d sho# Pa*ty BHs te%hn!%!an the $a*.e* "o* ea%h sty-e and $+st hae the
sa!d te%hn!%!anHs a''*oa- ,e"o*e %+tt!n2.
8. In %ase o" $o*e o* -ess %ons+$'t!on o" she-- $ate*!a- o* -!n!n21 a%%esso*!es1 the te%hn!%!anHs
%onsent !n #*!t!n2 !s *e>+!*ed ,e"o*e %+tt!n2 !s $adem othe*#!se 'a*ty B #!-- %ha*2e ,a%. a-- the a-+e
!n the a,sen%e o" the te%hn!%!anHs %onsent a"o*esa!d
(. Any '*o,-e$ a2a!nst 'a'e* 'atte*n and se#!n2 sho+-d ,e ad!sed to BHs te%hn!%!an !$$ed!ate-y
,e"o*e '*od+%t!on '*o%eeds.
<. An a+tho*!Eed *e'*esentat!e "*o$ 'a*ty B #!-- %o$e to !ns'e%t the 2oods d+*!n2 '*od+%t!on and
,e"o*e sh!'$ent.
=. Pa*ty AHs "a%to*!es sha-- !n"o*$ 'a*ty B and the!* te%hn!%!an that they $ay $a.e the "!na-
!ns'e%t!on 0 days ,e"o*e Sh!''!n2m !" a"te* !ns'e%t!on !s $ade 2a*$ents hae ,een *eCe%ted1 "a%to*!es
st!-- hae t!$e to *e'a!* and $a!nta!n the de-!e*y date.
8. A"te* "!n!shed 2a*$ents de-!e*y1 Pa*ty AHs7 "a%to*!es sho+-d send 0 sa$'-es Ms$a-- s!Ee) o" ea%h
sty-e to Pa*ty B as sh!'$ent sa$'-es
@. In the eent Pa*ty A '*od+%e an +na%%e'ta,-e >+a-!ty standa*d1 o* da$a2e the "a,*!% #h!%h has
,een de-!e*ed ,y Ste!-$ann1 !t !s he*e#!th a2*eed that 'a*ty A sho+-d 'ay "o* the "a,*!% and
a%%esso*!es %ost a2a!nst the "+-- !no!%e a-+em the >+a-!ty standa*ds a*e ,ased on the a''*oedm
sa$'-e %on"!*$ed ,y Pa*ty B o* the Ste!-$ann te%hn!%!an M!n th!s %ase te%hn!%!an sha-- 2!e te%hn!%a-
2+!dan%e)
D. 1.ipment
1. 9e-!e*y t!$e o" ea%h sty-e sha-- ,e #!th!n 4)7 8( days Mde'end!n2 on the >+a-!ty o" ea%h
sty-eo*de* to ,e '*o%essed) a"te* Pa*ty AHs "a%to*!es *e%e!e "a,*!% $ate*!a-sa%%esso*!es !n %o$'-ete
sets.
0. Pa*ty A sha-- !n"o*$ Pa*ty B o" the est!$ated t!$e the "!n!shed '*od+%ts #!-- ,e *eady "o* -oad!n2 =
days '*!o* to s+%h est!$ated t!$e.
4. ;o* a''o!nted A!* ;o*#a*de* B S%hen.e*
A-- the o*!2!na- sh!''!n2 do%+$ents !n%-+d!n2 o*!2!na- A!* Way ,!--1 o*!2!na- %e*t!"!%ate o" o*!2!nm
o*!2!na- !no!%e and 'a%.!n27-!st sho+-d ,e sent to S%hen.e* at the t!$e #hen 2oods de'a*t.
8. ;o* a''o!nted sea "o*#a*de*B Ea%7Sa!2on Sh!''!n2 Se*!%e Gtd.m A-- the sh!''!n2 do%+$ents
!n%-+ded !ns'e%t!on %e*t!"!%ate !ss+ed ,y Ste!-$ann te%hn!%!ans.
E. +a$ment
A-- the 'ay$ents sha-- ,e $ade ,y !**eo%a,-e Gette* o" C*ed!t at s!2ht. The Gette* o" C*ed!t $+st ,e
esta,-!shed 4) days ,e"o*e sh!'$ent.
(. 2r"itration
1. The t#o 'a*t!es sha-- a$!%a,-y sett-e a-- the d!s'+tes a*!s!n2 d+*!n2 the 'e*"o*$an%e o" the
%ont*a%t. Sho+-d no sett-e$ent o" d!s'+tes o* s+%h d!""e*en%e o" o'!n!on ,e $ade a$!%a,-y1 then the
d!s'+tes and d!""e*en%e o" o'!n!on sha-- ,e sett-ed !n a%%o*dan%e #!th the A*,!t*at!on Re2+-at!ons o"
the ;o*e!2n T*ade A*,!t*at!on O*2an!Eat!on o" a th!*d %o+nt*y $+t+a--y a2*eed ,y the 'a*t!es.
0. The de%!s!on o" the sa!d a*,!t*at!on sha-- ,e "!na- and ,!nd!n2 +'on ,oth 'a*t!es.
Th!s Aene*a- te*$s and %ond!t!ons o" ,as!s o" C.M.P !s $ade !n En2-!sh !n s!6 %o'!es. Ea%h 'a*ty
.ee's th*ee %o'!es o" e>+a- a-!d!ty #!th e""e%t "*o$ the s!2n!n2 datem 'a*ty A sho+-d send one %o'y
to !ts "a%to*!es "o* *e"e*en%e.
Made !n Hano!1 on the (
th
1 A+2+st1 1@ ..
;ORAN9 ON BEHAG; O; SI9E A ;ORAN9 ON BEHAG; O; SI9E B
E##en Co. L-D <enera#exim
MS!2ned) MS!2nedsea-ed)
D. Ellen T*an* T!n$
Aene*a- Mana2e* 9e'7Aene*a- 9!*e%to*
2nnex no: @1
-3 -5E <ENER2L -ERM1
2ND C3NDI-I3N1 3N 421I1 3( C.M.+
NoB )8Aen7EGGEN1@ ..
Pa*ty AB DIETNAM NATIONAG. AENERAG EPORT7IMPORT
CORPORATION MAENERAGEIM)
8<1 N2o Q+yen st*eet.
Hano!1 S.R. o" D!etna$ MHe*e!na"te* %a--ed KPa*ty AK)
Pa*ty BB EGGEN CO.GT9
1()871(1) Sta* Ho+se1
Sa-!s,+*y Road1 /o#-oon1 Hon2.on2 MHe*e!na"te* %a--ed KPa*ty BK)
Today (
th
1 A+2.1 1@ ...1 the t#o Pa*t!es hae a2*eed to s!2n th!s Anne6 to the a,oe7$ent!oned
Cont*a%t on the "o--o#!n2 te*$s %on%e*n!n2 the $ate*!a-s and a%%esso*!es "o* the '*o%ess!n2 o" the
%o$$od!tyB
2rti#e I: MATERIAGS.AN9 ACCESSORIES ;OR
THE PROCESSINA OP THE COMMO9IT:
S!de B sha-- s+''-y a-- the $ate*!a-s and a%%esso*!es to s!de A as "o--o#!n2 %a-%+-at!on MBased on
CI; HAIPHONA o* C1; NOIBAI)
7 ;a,*!%B 1))1))) Met*es
- A%%esso*!esB #o*th 1))1))).)) US9
2rti#e II: TIME O; 9EGIDER:
A-- the $ate*!a-s and a%%esso*!es s+''-!ed ,y S!de B $+st ,e de-!e*ed at Ha!'hon2 Po*t 1) days
'*!o* to sta*t!n2 '*od+%t!on "o* ea%h sty-e1 "*o$ the end o" Se'te$,e*1 1@ .. to the end o" Noe$,e*
1@ .. and to add*essB
7 Cons!2nee and Not!"y 'a*tyB
DIETNAM NATIONAG AENERAG EPORT IMPORT CORPORATION1
8<1 NAO QU:EN STREET1 HANOI. S.R. O; DIETNAM
Othe* %ond!t!ons not $ent!oned !n th!s anne6 a*e to ,e 'e*"o*$ed as those !n the %ont*a%t NoB
)8AEN7EGGEN1@ ..
;ORAN9 ON BEHAG; O; SI9E A ;ORAN9 ON BEHAG; O; SI9E B
Anne6 noB )0
-3 <ENER2L -ERM1
2ND C3NDI-I3N1 3N 421IC1 3( C.M.+
NoB )8Aen 7 E--en1@...
Pa*ty AB . D!etna$ Nat!ona- Aene*a- E6'o*t
I$'o*t %o*'o*at!on 8<1 N2o Q+yen St*eet1 Hano!7D!etna$
MHe*e!na"te* %a--ed KS!de AK)
Pa*ty BB E--en Co.GT9
1()871(1) Sta* Ho+se
Sa-!s,+*y Road1 /o#-oon1 Hon2.on2 MHe*e!na"te* %a--ed KS!de BK)
Today (th. A+2+st1 [email protected] the t#o Pa*t!es hae a2*eed to s!2n th!s anne6 to the a,oe $ent!oned
%ont*a%t on the "o--o#!n2 te*$s and %ond!t!ons %on%e*n!n2 the %o$$od!ty and >+ant!ty1 '*!%e and
t!$e o" de-!e*y
1. A*t!%-e IB
Co$$od!ty Q+ant!ty C.M.P '*!%e A$o+nt
Ja%.et Sty-e
NoB
4n MUS9;OB Ha!'hon2
o* No!,a!)
(8)1170 410=) 018) =1888.))
(8)117( 414(= 018) 81)(<.8)
(8804 01=(8 011) ([email protected])
Tota- @148( P!e%es US9 011<@<.<)
MCMP '*!%e s!de A +nde*ta.es "o* 'a%.!n2 s+%h asB o+te* %a*ton1 '-ast!% ,ands and o*PE ,a2%tn
st!%.y ta'e on-y)
0. A*t!%-e IIB T!$e o" de-!e*y
Sh!'$ent t!$e o" "!n!shed '*od+%ts "*o$ Noe$,e* 1@ ... to end o" 9e%e$,e* 1@ ....
4. A*t!%-e IIIB Co+nt*y o" dest!nat!onB Ae*$any
Othe* %ond!t!ons not $ent!oned !n th!s anne6 a*e to Be 'e*"o*$ed as those !n the Cont*a%t NoB
)8AEN 7 e--en1@ ...
;ORAN9 ON BEHAG; O; SI9E A ;ORAN9 ON BEHAG; O; SI9E B
-rans#ate into Eng#is.
CN< 52 B 5I C5 N<52 >Io- N2M
Xp #Mp -w =o 5jn. p.
5[+ X\N< <I2 CnN< X- 5N<
1J: A5X<C

7 Cn %x PhR' -`nh H/T n2Qy 0(7@71@8@ %wa HP! S]n2 NhQ nTd%.
7 Cn %x N2h\ S\nh s 1= n2Qy 1<7171@@) %wa HP! S]n2 ,P t*T^n2 >+y S\nh %h! t!ct !`% th!
hQnh PhR' -`nh H/T.
7 Cn %x............. M%hc SP1 thV -` %wa n2Qnh t!V+1 thw %pn2 n2h!`').
Hp$ nay1 n2Qy........ thRn2........ n$ ........
Ts!.......................................... M\a S!V$ .e .ct).
Chin2 tp! 2]$ %_B
BNn A MBNn Szt hQn2)B
7 TNn doanh n2h!`' Mhoz% %} >+an)B ........................................................................................
7 \a %hB ......................................................................................................................
7 !`n thos!B ................................................................................................................
7 TQ! .hoXn sB........................................ M^ ts! n2n hQn2B ...................................................
7 s! d!`n -Q n2 M,Q)B............................................ Chx% rB ....................................
7 A!fy wy >+yvn sB...................................................................................................... Mnv+ %_).
D!ct n2Qy...................... 9o............................. %hx% r............................................... .e.
BNn B M,Nn sXn 6+ft 2!a %pn2)B.................................................................................................
7 TNn doanh n2h!`' Mhoz% %} >+an)B ......................................................................................
7 \a %hB ....................................................................................................................
7 !`n thos!B ..............................................................................................................
7 TQ! .hoXn sB................................... M^ ts! n2n hQn2B ......................................................
7 s! d!`n -Q n2 M,Q)B....................................... Chx% rB ......................................................
7 A!fy wy >+yvn sB.................................................................................................. Mnv+ %_).
D!ct n2Qy.......................... 9o................ %hx% r .........................................e.
Ha! ,Nn thn2 nhft thYa th+Zn -Z' hU' S]n2 d! nP! d+n2 nhT sa+B
!v+ 1B ! tTUn2 hU' S]n2B
1. TNn sXn 'hg$ hQn2 h_a %|n sXn 6+ftB .....................................................
0. Q+y %R%h 'hg$ %hftB
7 ..............................................................................................
7 .............................................................................................
7.............................................................................................
!v+ 0B N2+yNn Zt -!`+ %hjnh Q 'hrB
1. BNn A %_ t*R%h nh!`$ %+n2 xn2 n2+yNn Zt -!`+ %hjnh 2]$
a7 TNn tyn2 -os!B................ S -TUn2B .....................%hft -TUn2m ....................................
,7 Thu! 2!an 2!aoB.................. Ts! S\a S!V$B .................................M/ho ,Nn B)
%7 T*R%h nh!`$ ,Xo >+XnB ,Nn B %h\+ $~! t*R%h nh!`$ v s -TUn21 %hft -TUn2 %R% n2+yNn -!`+
do ,Nn A %+n2 xn2 Q 'hX! s drn2 Sin2 -os! n2+yNn -!`+ S 2!ao Qo sXn 6+ft sXn 'hg$.
0. BNn B %_ t*R%h nh!`$ %+n2 xn2 %R% 'hr -!`+ SV sXn 6+ftB
a7 TNn tyn2 -os!B............... s -TUn2B.............. S}n 2!RMhoz% >+y S\nh %hft -TUn2 theo hQ$
-TUn21 theo t!N+ %h+gn).
,7 BNn A %+n2 xn2 t!vn t*Td% SV $+a 'hr -!`+ t*Nn. Tn2 %h! 'hj
-QB .................................................
!v+ 4B Thu! 2!an sXn 6+ft Q 2!ao sXn 'hg$B
1. BNn B ,Ot S|+ sXn 6+ft ty n2Qy ............................
T*on2 >+R t*[nh sXn 6+ft ,Nn A %_ >+yvn .!V$ t*a Q yN+ %|+ ,Nn B sXn 6+ft theo Sin2 $t+
sXn 'hg$ S thYa th+Zn ,Ot S|+ ty n2Qy STa n2+yNn -!`+ Qo sXn 6+ft Mnc+ %|n).
0. Thu! 2!an 2!ao nhZn sXn 'hg$B
Nc+ 2!ao theo SUt th[B
a7 Ut 1B n2Qy........................... \a S!V$B ............................
,7 Ut 1B n2Qy.......................... \a S!V$B .............................
%7 Ut 1B n2Qy........................... \a S!V$B ............................
Nc+ ,Nn A .hpn2 nhZn Sin2 thu! 2!an sW ,\ 'hst -T+ .ho -QB
Nc+ ,Nn B .hpn2 2!ao hQn2 Sin2 thu! 2!an1 S\a S!V$ sW 'hX! ,]! thTun2 %R% %h!
'hjB..............................
!v+ 8B CR% ,!`n 'hR' ,Xo SX$ hU' S]n2 Mnc+ %|n)
!v+ (B Thanh toRnB
ThYa th+Zn thanh toRn toQn ,P hay tyn2 SUt sa+ .h! nhZn hQn2.
Thanh toRn ,hn2 t!vn $zt hay %h+yVn .hoXnB .....................................................
!v+ <B T*R%h nh!`$ do ! 'hs$ hU' S]n2B
1. D! 'hs$ v %hft -TUn2B M-Q$ -s!1 2!X$ 2!R1 sa %hqa1 ,]! thTun2 n2+yNn Zt -!`+ .J).
0. D! 'hs$ s -TUn2B n2+yNn Zt -!`+ .hpn2 hT hYn2 'hX! ,]! thTun2 n2+yNn -!`+ theo 2!R h!`n
thu!
4. /e hU' S]n2 $Q .hpn2 tha% h!`nB ,\ 'hst td! 10n 2!R t*\ hU' S]n2.
8. D! 'hs$ n2ha r thanh toRnB ,]! thTun2 theo t -` -! s+ft n2n hQn2 .J
!v+ =B Thw tr% 2!X! >+yct t*anh %hf' hU' S]n2
1. Ha! ,Nn %|n %hw SPn2 thpn2 ,Ro %ho nha+ ,!ct t!cn SP tha% h!`n hU' S]n21 nc+ %_ fn Sv ,ft
-U! 'hRt s!nh %R% ,Nn .\' thu! ,Ro %ho nha+ ,!ct Q %hw SPn2 ,Qn ,s% 2!X! >+yct t*Nn %} s^ thT}n2
-TUn2 SX$ ,Xo ha! ,Nn %n2 %_ -U! M%_ -Z' ,!Nn ,Xn).
A*t!%-e =B P*o%ed+*e "o* d!s'+te sett-e$ent
1. The t#o s!des sho+-d !n"o*$ ea%h othe* o" '*o2*esses a%h!eed #h!-e e6e%+t!n2 the %ont*a%t.
I" the*e !s any t*o+,-e a*!s!n21 e!the* s!de sho+-d ,e not!"!ed and d!s%+ss #!th the othe* s!de a,o+t the
*eso-+t!on on the ,as!s o" $+t+a- ,ene"!t Mthe $!n+tes sho+-d ,e t*ans%*!,ed).
0. T*Tun2 hU' %_ fn Sv t*anh %hf' .hpn2 ta thT}n2 -TUn2 STU%1 ha! ,Nn thn2 nhft %h+yVn
r !`% Scn ta Rn -Q %} >+an %_ Sw thg$ >+yvn 2!X! >+yct nhqn2 r t*anh %hf' nQy. In %ase that
the*e !s any d!s'+te that %annot ,e sett-ed1 !t !s a2*eed that the %ase #!-- %a-- "o* the %o+*t3s a+tho*!ty.
4. CR% %h! 'hj v .!V$ t*a1 6R% $!nh Q -` 'hj t*~n2 tQ! do ,Nn %_ -! %h\+. E6'enses "o*
e*!"!%at!on and a*,!t*at!on sha-- ,e at the "a+-ty s!de3s a%%o+nt.
!v+ 8B CR% thYa th+Zn .hR% Mnc+ %|n)
!v+ @B H!`+ -a% %wa hU' S]n2B
HU' S]n2 nQy %_ h!`+ -a% ty n2Qy.................... Scn n2Qy .......................
Ha! ,Nn sW t %hx% h~' Q -Z' ,!Nn ,Xn thanh -e hU' S]n2 sa+ S_.................. n2Qy. BNn A %_
t*R%h nh!`$ t %hx% Qo thu! 2!an1 S\a S!V$ thj%h hU'.
HU' S]n2 nQy STU% -Q$ thQnh ,Xn %_ 2!R t*\ nhT nha+1 $! ,Nn 2!q......... ,Xn.

X~I DIoN 4N 2
C.s &v:
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X~I DIoN 4N 4
C.s &v:
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*. -.ir=-+art$ 1e9rit$ for +a$ment
THE PROBLEM
A%%e't!n2 a 'e*sona- %he%. o* t*ad!n2 on o'en
a%%o+ntl,oth a*e dan2e*o+s "o* the e6'o*te*.
What .!nd o" th!*d7'a*ty se%+*!ty *ed+%es the
e6'o*te*Hs *!s.&
THE PRINIPLE
Th!*d7'a*ty se%+*!ty ta.es t#o "o*$sB e6'o*t %*ed!t !ns+*an%e a--o#s the e6'o*te* to *e%oe* the $aCo*
'a*t o" the %ont*a%t '*!%e !" the ,+ye* "a!-s to 'ay a"te*1 say1 s!6 $onths. The ,+ye* $ay a-so a''*oa%h
a ,an. and as. "o* a ,an. 2+a*anteelthe ,an. #!-- 'ay the %ont*a%t '*!%e !" the ,+ye* "a!-s to do so.
IN MORE DEPTH
R!s. and %ostlthey *!se and "a-- to2ethe*. So$e *!s.s a*e s!$'-y too h!2h to ,e a%%e'ta,-e. ;o*
e6a$'-e1 -etHs say Red Bean E6'o*ts has an e6'o*t o*de* "o* 01))) tons o" *ed ,eans. I" th!s
*e'*esents ).1n o" ann+a- t+*noe* and the ,+ye* "a!-s to 'ay1 Red Bean #!-- not 2o ,an.*+'t. I"1
ho#ee*1 01))) tons !s 8)n o" t+*noe*1 "a!-+*e o" the ,+ye* to 'ay %o+-d dest*oy the %o$'any.
Whe*e *!s.s a*e s!2n!"!%ant1 the e6'o*te* see.s #ays to $!n!$!Ee the$leen tho+2h %osts #!-- *!se.
A %-ass!% st*ate2y "o* *ed+%!n2 *!s. !s to s'*ead !t ,y $eans o" a th!*d 'a*tylan !ns+*an%e %o$'any1
"o* e6a$'-e. E6'o*t %*ed!t !ns+*an%e !s one *o+te to se%+*!tym the ,an. 2+a*antee !s anothe*.
E6'o*t C*ed!t Ins+*an%e
Inte*nat!ona- t*ade !s "!e*%e-y %o$'et!t!e. E6'o*te*s %o$'ete not on-y on >+a-!ty1 '*!%e and de-!e*y
te*$sm they a-so %o$'ete !n the a*ea o" %*ed!tB KI" yo+ ,+y "*o$ $e1 I #!-- a--o# yo+ 18) days to
'ay.K S+%h an o""e* %an $a.e o* ,*ea. a dea-. Ho#ee*1 e6tend!n2 %*ed!t !n th!s #ay !s *!s.y. The
,+ye* $ay 2o ,an.*+'t1 o* he $ay se-- the 2oods he *e%e!es and d!sa''ea*. Po-!t!%a- d!""!%+-t!es too
%an ,-o%. 'ay$entB %!!- #a*1 "a$!ne1 -a%. o" "o*e!2n e6%han2e1 and so onlthe -!st !s a -on2 one.
To st!$+-ate e6'o*ts and '*ote%t the e6'o*te* a2a!nst $aCo* *!s.s1 so$e %o+nt*!es set +' a s'e%!a- ty'e
o" !ns+*an%eB !t does not !ns+*e 2oods1 ,+t !t !ns+*es the e6'o*te* a2a!nst the *!s. o" non7'ay$ent.
Most t*ad!t!ona- e6'o*t!n2 nat!onslthe E+*o'ean %o+nt*!es1 "o* e6a$'-elo""e* s+%h !ns+*an%e.
!$,a,#e !s an e6a$'-e o" a dee-o'!n2 %o+nt*y that he-'s !ts e6'o*te*s !n th!s #ay. MIt !s #o*th
st*ess!n2 that e6'o*t %*ed!t !ns+*an%e !s not a %ha*!ty ,+t a %o$$e*%!a--y !a,-e '*o'os!t!onm e6'o*t
%*ed!t !ns+*an%e %o$'an!es %o$$on-y *e'o*t +' to 1(n '*o"!t on the!* ,+s!ness.)
To ,+y s+%h !ns+*an%e1 the e6'o*te* e6'-a!ns the deta!-s o" the ,+s!ness to an !ns+*an%e %o$'any and
*e%e!es a >+otat!on. So$et!$es the !ns+*e* *e"+ses to >+ote. Th!s $ay $ean that the !ns+*e* has +sed
!ts net#o*. to *+n so$e %he%.s on the ,+ye* and "o+nd the ,+ye* +n%*ed!t#o*thy. Th!s !s a s!2n to the
e6'o*te* that the ,+s!ness !s *!s.y. MIt $!2ht a-so $ean that the !ns+*e* has %he%.ed on the e)porter
and "o+nd so$e '*o,-e$sB a %*!$!na- *e%o*d1 'e*ha's1 o* a h!sto*y o" +n'a!d !ns+*an%e '*e$!+$s.)
E6'o*t !ns+*an%e '*e$!+$s a*y a%%o*d!n2 to the ty'e o" 2oods e6'o*ted1 the %*ed!t#o*th!ness o" the
,+ye*1 the 'o-!t!%a- sta,!-!ty o" the ,+ye*Hs %o+nt*y1 and so on. ;!2+*es $ent!oned to the a+tho* ,y the
!$,a,#e C*ed!t Ins+*an%e Co*'o*at!on a*e att*a%t!e1 ho#ee*la ty'!%a- 'o-!%y %osts ,et#een
).(n and 1n o" the !no!%e '*!%e.
Att*a%t!e as !t !s1 e6'o*t %*ed!t !ns+*an%e has %e*ta!n %-ea* -!$!tat!onsB the*e !s a-#ays a -on2 #a!t
,et#een the t!$e #hen the ,+ye* "a!-s to 'ay and the t!$e #hen !ns+*an%e %o$'any %o$'ensates the
e6'o*te*ls!6 $onths !s ty'!%a-. And #hen %o$'ensat!on !s 'a!d1 !t !s +n-!.e-y to %oe* 1))n o" the
o*!2!na- !no!%e '*!%e. Ho#ee*1 #!th e6'o*t %*ed!t !ns+*an%e1 the e6'o*te* !s %oe*ed a2a!nst the
#o*st.
I" yo+* %o+nt*y o""e*s e6'o*t %*ed!t !ns+*an%e1 yo+ sho+-d %e*ta!n-y %ons!de* +s!n2 !t "o* t*ade #!th
%+sto$e*s yo+ .no# on-y s-!2ht-y and "o* s!n2-e t*ansa%t!ons that *e'*esent a h!2h '*o'o*t!on o" yo+*
t+*noe*. ;+*the*1 $any ,+ye*s a*e *e-+%tant to s'end $oney on a 'ay$ent 2+a*antee o* to t!e +'
$oney !n a -ette* o" %*ed!tl!n a ,+ye*Hs $a*.et1 e6'o*t %*ed!t !ns+*an%e $ay 2!e the e6'o*te* a
%o$'et!t!e ed2e.
+a$ment <9arantee
What !s a K2+a*anteeK& GetHs say I '*o$!se to 'ay yo+ S 11))). :o+ a*e not s+*e that I hae the
$oney1 so yo+ te-- $e to "!nd a "*!end1 a $!arantor M!n the e6'o*t t*ade no*$a--y a ,an.)1 to $a.e a
se%ond '*o$!seB the 2+a*anto* #!-- 'ay the bene#iciary Myo+) !" the '*!n%!'a- M$e) "a!-s to .ee' the
o*!2!na- '*o$!se. I" yo+ do not 2et the SI1I//) "*o$ $e1 yo+ #!-- 2et !t "*o$ the han.. The
*e-at!onsh!' !s a t*!an2-e.
The te*$!no-o2y o" 2+a*antees !s %on"+sed. A 2+a*antee M!n the '*esent sense) !s so$et!$es %a--ed a
bon+ o* a s!rety. The*e a*e te%hn!%a- d!""e*en%es a$on2 the th*ee te*$s1 ,+t yo+ %an no*$a--y !2no*e
the$. Anothe* '*o,-e$ !s that the #o*d $!arantee !s %o$$on-y +sed to $ean "arranty o* +e#ects
liabilityl#hen yo+ ,+y a #at%h !t $ay %o$e #!th a so7%a--ed K2+a*antee.K In 2ene*a-1 t*y to ao!d
th!s %on"+s!on ,y +s!n2 the #o*d $!arantee on-y #!th!n the t*!an2+-a* *e-at!onsh!' sho#n a,oe.
A+a*antees a*e %o$$on-y +sed !n "o+* ,+s!ness s!t+at!onsm !n ea%h %ase one 'a*ty !s 'a*t!%+-a*-y at
*!s.lhe has 'e*"o*$ed ,+t the othe* s!de has not yet *es'onded. O" 'a*t!%+-a* !nte*est he*e !s the
'ay$ent 2+a*antee1 ,+t yo+ #!-- o"ten $eet the othe* 2+a*antees !n e6'o*t ,+s!ness.
Ris6 48 Non9a-mentPa-ment !&arantee
;o* the e6'o*te* the*e !s one $aCo* *!s.B not ,e!n2 'a!d. A 'ay$ent 2+a*antee s!$'-y %o$$!ts the
,an. to 'ay !" the ,+ye* de"a+-ts. The 'ay$ent 2+a*antee !s +s+a--y "o* 1))n o" the %ont*a%t '*!%e.
Ris6 28 Re7ocationTender !&arantee
P*o%+*e$ent %ont*a%ts1 es'e%!a--y at 2oe*n$ent -ee-1 a*e '+t +' "o* tende* o* ,!d. An e6'o*te* $ay
#e-- ,!d on a %ont*a%t to s+''-y 2oods o* $ate*!a-s to a 2oe*n$ent de'a*t$ent o* a2en%y. Ina*!a,-y
th!s de'a*t$ent as.s "o* a ten+er $!arantee Mo* ,!d ,ond). I" the #o+-d7,e e6'o*te* #!thd*a#s h!s
tende*1 then the tende* 2+a*antee !s "o*"e!t. Th!s 2+a*ds the de'a*t$ent a2a!nst the *!s. o" a '*oCe%t
"a--!n2 ,eh!nd ,e%a+se a tende* !s #!thd*a#n.
88
A no*$a- "!2+*e "o* a tende* 2+a*antee !s ,et#een
1.(n and (n o" the %ont*a%t '*!%e.
Ris6 :8 Non9PerformancePerformance !&arantee
I" yo+ a*e se--!n2 2oods on an ;OB ,as!s1 yo+ a*e +n-!.e-y to $eet the per#ormance $!arantee. I"1
ho#ee*1 yo+ o""e* se*!%es as #e-- as 2oods1 the 'e*"o*$an%e 2+a*antee %an ,e !$'o*tant. It s!$'-y
says that !" yo+ #o*. ,ad-y o* not at a--1 then the 2+a*anto* #!-- 'ay1 #!th!n stated -!$!ts1 the %osts o"
yo+* "a!-+*e to 'e*"o*$. A no*$a- "!2+*e "o* a 'e*"o*$an%e 2+a*antee !s ,et#een (n and 1)n o" the
%ont*a%t '*!%e.
Ris4 @- Losin$ PrepaymentlPrepayment ?!arantee
Man+"a%t+*e*s o"ten as. "o* an adan%e 'ay$ent1 es'e%!a--y !" !te$s a*e %+sto$7$ade "o* the ,+ye*.
Ma.!n2 th!s '*e'ay$ent !s a *!s. "o* the ,+ye* +nt!- the !te$s a**!e !n #o*.!n2 o*de*. The a+vance
payment $!arantee '*o$!ses the ,+ye* that the ,an. #!-- *et+*n adan%e 'ay$ents !" the e6'o*te*
"a!-s to de-!e*. The 2+a*antee !s no*$a--y "o* 1))n o" the '*e'ay$ent1 de%*eas!n2 as de-!e*!es a*e
$ade.
In $ost 2+a*antees1 the ,an. a2*ees to 'ay Kon "!*st de$andK and K#!tho+t de$+* o* o,Ce%t!onK Mo* a
s!$!-a* #o*d!n2). Th!s '*o$!se %an ,e ta.en -!te*a--yB the $o$ent that the ,ene"!%!a*y de$ands
'ay$ent +nde* the 2+a*antee1 the ,an. #!-- 'ay. MNat+*a--y the ,an. #!-- !$$ed!ate-y #!thd*a# the
$oney !t has 'a!d "*o$ the a%%o+nt o" the '*!n%!'a-.) S+%h 2+a*antees a*e %a--ed Kde$and
2+a*anteesKB the*e a*e no se*!o+s1 o,Ce%t!e %ond!t!ons the ,ene"!%!a*y $+st $eet ,e"o*e %-a!$!n2
'ay$ent o" the 2+a*antee. Th!s %an >+!%.-y -ead to a,+se1 and $any %o+*t %ases a*!se "*o$ de$and
2+a*antees. GetHs ta.e a ty'!%a- s%ena*!o.
88
Unde* the -a#s o" $any %o+nt*!es that de*!e the!* -e2a- th!n.!n2 "*o$ En2-and1 an o""e* %an ,e
#!thd*a#n at any t!$e ,e"o*e a%%e'tan%e. See Cha'te* 81 Se%t!on 4 "o* $o*e !n"o*$at!on.
,cenario- Es'e*anEa T*ad!n21 the ,+ye*1 as.s B!2 Ban. to !ss+e a 'ay$ent 2+a*antee !n "ao* o"
O""!%e Ente*'*!ses1 the e6'o*te*. The ,an. %o$'-!es. T#o days a"te* the a2*eed 'ay$ent date1
Es'e*anEa T*ad!n2 has not yet 'a!d. O""!%e Ente*'*!ses a%%o*d!n2-y as.s the ,an. to 'ay the $oney.
The ,an. "!*st not!"!es Es'e*anEa T*ad!n2 that !t !s a,o+t to 'ay. Es'e*anEa says that the 2oods #e*e
de"e%t!e and te--s the ,an. to #!thho-d 'ay$ent. The ,an. -oo.s a2a!n at the te6t o" the 2+a*anteeB
KWe +nde*ta.e to 'ay yo+ on yo+* "!*st #*!tten de$and #!tho+t %a!- o* de$+*....K The ,an. says !t
#!-- 'ay1 *e2a*d-ess o" the >+a-!ty o" the 2oods. An2*!-y1 De*,ena T*ad!n2 as.s a C+d2e "o* an
!nC+n%t!on M an o*de* "o*,!dd!n2 so$eth!n2) to "o*,!d the ,an. "*o$ 1 $a.!n2 'ay$ent. J+d2es
no*$a--y *e"+se to 2*ant s+%h !nC+n%t!ons. A I de$and 2+a*antee !s e6a%t-y thatla 2+a*antee 'a!d on
de$and.
The '*o,-e$ o" a ,ene"!%!a*y "a-se-y o* !$'*o'e*-y de$and!n2 'ay$ent !s a-so a se*!o+s one. I" the
,an. has a2*eed to 'ay1 !t #!-- 'ay +n-ess the*e !s e!den%e o" ,-atant "*a+d. I" de$and 2+a*antees a*e
so *!s.y1 'e*ha's a con+itional 2+a*antee #o+-d ,e '*e"e*a,-e.
A %ond!t!ona- 2+a*antee %onta!ns se*!o+s1 o,Ce%t!e %ond!t!ons that $+st ,e $et ,e"o*e 'ay$ent ,y
the ,an. !s 'oss!,-e. These %ond!t!ons %annot *e"e* to the %ond!t!on o" de-!e*ed 2oodslthe ,an. has
no #ay o" ea-+at!n2 s+%h th!n2s. The ICC t*!ed !n t#o 'a$'h-ets. cni#orm R!les #or ontract
?!arantees M1@=8) and Mo+el 5orms #or Iss!in$ ontract ?!arantees M1@80) to set +' o,Ce%t!e
%ond!t!ons that a ,an. $!2ht "!nd #o*.a,-e. It s+22ested th*ee. The ,an. #o+-d 'ay !" the %-a!$ #e*e
s+''o*ted ,yB
o A de%!s!on o" the %o+*t o" "!*st !nstan%e Ma de%!s!on ,y a C+d2e)m
o An a*,!t*a- a#a*d Ma de%!s!on ,y a %o+*t o" a*,!t*at!on)m
o The a''*oa- o" the P*!n%!'a- !n #*!t!n2 to the %-a!$.
It !s not -!.e-y that any ,ene"!%!a*y #o+-d a2*ee to o,Ce%t!e %ond!t!ons as ha*sh as th!sland so $ost
,an. 2+a*antees a*e o" the Kde$andK .!nd. In "a%t1 ,e%a+se 2+a*antees *+n !nto t*o+,-e so o"ten1 and
,e%a+se they a*e e6'ens!e to set +'1 "e# e6'o*te*s as. "o* the$ as se%+*!ty "o* 'ay$entB the -ette* o"
%*ed!t !s $+%h '*e"e**ed.
8(
The $ost *e%ent th!n.!n2 on de$and 2+a*antees s+22ests a K%o+nte*72+a*anteeK that #o*.s -!.e th!s.
I" I1 as e6'o*te*1 de$and 'ay$ent o" a 2+a*antee !ss+ed ,y the ,+ye*Hs ,an. "o*1 -etHs say SIOO.OOO1
I $+st at the sa$e t!$e 'ost a %o+nt%*2+a*antee1 a-so "o* SIOO.OOO !n "ao* o" the ,+ye*. The ,+ye*
%an %o--e%t th!s $oney !" !t %an ,e '*oed that I %o--e%ted the o*!2!na- 2+a*antee !$'*o'e*-y. ;o*
deta!-s1 see ICC P+,-!%at!on No. 8(81 cni#orm R!les #or Deman+ ?!arantees.
CA;E ;T<D=
1tan= an= De#i&er
Be-o# !s the "!*st 'a*t o" a 'ay$ent 2+a*antee !ss+ed !n standa*d ,an. "o*$. St+dy !t1 and then
ans#e* the >+est!ons.
Pay$ent A+a*antee No. =<(80@0
Re"e*en%e !s $ade to the o*de* No. WE 488 / '-a%ed #!th yo+ as s+''-!e*s ,y M+-t!7I$'o*t "o* the
s+''-y o" !nte2*ated %!*%+!ts.
A%%o*d!n2 to the %ond!t!ons o" th!s o*de*1 the B+ye* has to "+*n!sh a 'ay$ent 2+a*antee !n the
a$o+nt o" US9 <))1))). By o*de* o" the B+ye*1 #e1 B!2 Ban. o" E+*o-and1 he*e,y esta,-!sh th!s
2+a*antee and +nde*ta.e !**eo%a,-y to 'ay to yo+ #!tho+t de$+* o* o,Ce%t!on any o+tstand!n2
a$o+nt not e6%eed!n2 US9 <))1)))
say Un!ted States 9o--a* s!6 h+nd*ed tho+sand on-y
+'on yo+* "!*st #*!tten de$and stat!n2 that the B+ye* has "a!-ed to e""e%t the o+tstand!n2 'ay$ent at
$at+*!ty. O+* -!a,!-!ty +nde* th!s 2+a*antee #!-- e6'!*e as soon as th!s do%+$ent !s *et+*ned to +s1
-atest ho#ee*1 ,y 41st 9e%e$,e* 1@@<.
1. Who !s the '*!n%!'a-& SEGGER BU:ER BAN/
0. Who !s the 2+a*anto*& SEGGER BU:ER BAN/
4. Who !s the ,ene"!%!a*y& SEGGER BU:ER 4BAN/
8. Is th!s a Kde$andK 2+a*antee& :ES NO
(. I" the ,+ye* "a!-s to 'ay1 !s 'ay$ent se%+*e& :ES NO
What :o+ Sho+-d /no#
1. E6'o*t %*ed!t !ns+*an%e %oe*s the *!s. o" non7'ay$ent.
0. A+a*antees a*e des!2ned to *ed+%e %ont*a%t+a- *!s.s.
4. The 'ay$ent 2+a*antee *ed+%es the *!s. o" non7'ay$ent. The tende* 2+a*antee *ed+%es the *!s. o"
the *eo%at!on o" an o""e*m the 'e*"o*$an%e 2+a*antee *ed+%es the *!s. o" non7'e*"o*$an%e o*
!nade>+ate 'e*"o*$an%e ,y the e6'o*te*m the adan%e 'ay$ent 2+a*antee *ed+%es the *!s. o" -os!n2
'*e'ay$ents.
8. I" a ,an. !ss+es a Kde$and 2+a*antee1K !t $+st 'ay the 2+a*antee s+$ on "!*st de$and #!tho+t
>+est!on. S!n%e $ost 'ay$ent 2+a*antees a*e o" th!s ty'e1 they a*e dan2e*o+s "o* the '*!n%!'a- Mthe
,+ye*) and a*e se-do$ +sedm the -ette* o" %*ed!t !s "a* $o*e %o$$on.
%.4. LE--ER 3( CREDI- M'.8=)
PROBLEM
Gette*s o" %*ed!t a*e !ss+ed !n $any "o*$s "o* $any '+*'oses. So$e o""e* "!*st %-ass se%+*!ty "o* the
e6'o*te*B so$e a*e -!tt-e ,e-te* than a 'e*sona- %he%.. What -ette* o" %*ed!t te*$s sho+-d the e6'o*te*
t*y to ne2ot!ate&
PRINCIPLE
Most Ge--e*s o" %*ed!t a*e irrevocablesthey %annot ,e
#!thd*a#n. E6'o*te*s '*e"e* the -ette* o" %*ed!t to ,e
con#irme+ M!.e.1 'aya,-e ,y a -o%a- ,an. on "!*st
'*esentat!on o" %o**e%t sh!''!n2 do%+$ents) and 'aya,-e
at si$*t M!.e.1 'aya,-e !$$ed!ate-y).
H|+ hct GC th+P% -os! .hpn2 hwy n2an2
n2ha -Q ,Nn $+a .hpn2 thV thay S!.
NhQ 6+ft .hg+ thTun2 Sv n2h\ GC 6R%
nhZn Mn2ha -Q n2n hQn2 ^ nTd% 6+ft
.hg+ %h\+ t*R%h nh!`$ thanh toRn n2ay
.h! 6+ft t*[nh ,P %hxn2 ty hU' -` -|n S|+)
Q %_ thV t*X n2ay.
IN MORE DEPTH
The !dea- ty'e o" 'ay$ent "*o$ the e'6o*te*3s 'o!nt o"
!e# !s the !**eo%a,-e %on"!*$ed1 at7s!2ht -ette* o"
%*ed!t. The "!*st atte$'t to standa*d!Ee the$ #as $ade !n
1@44 #hen the Inte*nat!ona- Cha$,e* o" Co$$e*%e
!ss+ed the cni#orm !stoms an+ Practice #or
Doc!mentary re+its MUCP). Pa*t!es to a %ont*a%t %an
a2*ee to +se the UCP *+-es1 and $any do. Ty'!%a--y a
%ont*a%t st!'+-ates
PhT}n2 thx% thanh toRn -e tT^n2 S! d!
nhQ / -Q GC .hpn2 hwy n2an21 6R%
nhZn Q t*X n2ay. DQo n$ 1@44 ICC -|n
S|+ t!Nn S t!N+ %h+gn h_a ,hn2 UCP.
CR% ,Nn .e .ct hU' S]n2 %_ thV thYa
th+Zn s drn2 UCP1 Q %_ nh!v+ n2Tu! S
-Q$ nhT thc. T!N+ ,!V+ $Pt hU' S]n2 %_
thV >+y S\nhB
T*e B!yer, on receipt o# t*e on#irmation o# Or+er
#rom t*e ,eller, s*all at least '8 +ays prior to t*e
+ate o# +elivery open a con#irme+, irrevocable letter
o# cre+it. T*is cre+it s*all be s!b:ect to cni#orm
!stoms an+ Practice #or Doc!mentary re+its,
'88A Revision, I P!blication No. A88.
'8& o# t*e cre+it s*all be available a$ainst t*e
,eller<s +ra#t accompanie+ by invoicep t*e remainin$
B8& s*all be available a$ainst t*e ,eller<s +ra#t
accompanie+ by t*e s*ippin$ +oc!ments.
BNn $+a1 n2ay .h! nhZn STU% thT %hf' nhZn
S}n Szt hQn2 %wa ,Nn ,Rn1 t*on2 thu! hsn t!
th!V+ 0) n2Qy t*Td% n2Qy 2!ao hQn21 'hX! $^
GC .hpn2 thV hwy n2an21 6R% nhZn.
GC nQy theo Sin2 UCP <))1 fn hQnh n$
0))<.
0)n sW STU% thanh toRn n2ay .h! ,Nn ,Rn
6+ft t*[nh h! 'h!c+ .$ d! h_a S}nm 8)n
%n -s! sW STU% thanh toRn n2ay .h! ,Nn BRn
6+ft h! 'h!c+ .$ theo ,P %hxn2 ty.
A -ette* o" %*ed!t !s a ,!nd!n2 a2*ee$ent ,y a
,an. to 'ay a %e*ta!n s+$ o" $oney #hen the
e6'o*te* '*esents the ne%es!a*y do%+$ents to the
,an.. In a s+'e*$a*.et '+*%hase1 2oods a*e
e6%han2ed "o* $oneym !n a -ette* o" %*ed!t
s!t+at!on +oc!ments a*e e6%han2ed "o* $oneyl
that !s #hy -ette*s o" %*ed!t a*e "o*$a--y %a--ed
+oc!mentary cre+its. The -ette* o" %*ed!t !s !ss+ed
,y an !ss+!n2 ,an. at the *e>+est o" the ,+ye*.
The !ss+!n2 ,an. !s !n the %o+nt*y o" the ,+ye*1
so !t no*$n--y !nst*+%ts a ,an. !n the %o+nt*y o"
the e6'o*te*7 the ad!s!n2 ,an.7 to ad!se the
e6'o*te* that the -ette* o" %*ed!t has ,een o'ened.
The ad!s!n2 ,an. #!-- a-so hand-e a-- the
ne%essa*y 'a'e*#o*. #hen the e6'o*te* t*!es to
%o--e%t 'ay$ent.
The '*o%ess o" !ss+!n2 a -ette* o" %*ed!t ta.es '-a%e as "o--o#s
7 E6'o*te* and ,+ye* s!2n a %ont*a%t
7 The ,+ye* as.s a -o%a- ,an. to o'en a -ette* o" %*ed!t
7 The !ss+!n2 ,an. as.s a ,an. !n the e6'o*te*3s %o+nt*y to ad!se the e6'o*te* that the -ette* o" %*ed!t
has ,een o'ened
7 The ad!s!n2 ,an. ad!ses the e6'o*te* that the -ette* o" %*ed!t has ,een o'ened.
7 In the ne6t ste'1 the e6'o*te* sh!'s the 2oods. When the e6'o*te* 'asses the 2oods to the %a**!e*1 he
*e%e!es sh!''!n2 do%+$ents.
7 He '*esents these do%+$ents to the ,an. as e!den%e that the 2oods hae ,een sh!''ed.
7 The ad!s!n2 ,an. %he%.s the %o**e%tness o" the do%+$ents and sets the 'ay$ent '*o%ed+*e !n
$ot!on. The 'ay$ent '*o%ed+*e de'ends on the ty'e o" %*ed!tB so$et!$es the ad!s!n2 ,an. $e*e-y
sends the do%+$ents to the !ss+!n2 ,an. and a%ts as a %hanne- "o* 'ay$entm !n othe* %ases1 the
ad!s!n2 Mo* %on"!*$!n2) ,an. 'ays !$$ed!ate-y 5oe* the %o+nte*.?
7 The ad!s!n2 ,an. not!"!es the !ss+!n2 ,an. that the %*ed!t has ,een '*esented and "o*#a*ds the
sh!''!n2 do%+$ents
7 The !ss+!n2 ,an. t*ans"e*s ne%essa*y "+nds to the ad!s!n2 ,an..
T#o '*!n%!'-es se*e to$a.e the -ette* o" %*ed!t sa"e*BB Ma+tono$y1 and M,) st*!%t %o$'-!an%e.
A&tonom- ()1>,
The -ette* o" %*ed!t !s an a2*ee$ent ,y a ,an. to 'ay $oney a2a!nst do%+$entsB !t !s a se'a*ate
a2*ee$ent "*o$ the sa-es %ont*a%t and !s +n%onne%ted #!th !t. The ICC cni#orm !stom an+
Practice #or Doc!mentary re+its MUCP) $a.es th!s %-ea*B
C*ed!ts1 ,y the!* nat+*e1 a*e se'a*ate t*ansa%t!ons "*o$ the sa-es o* othe* %ont*a%tMs) on #h!%h they
$ay ,e ,ased and ,an.s a*e !n no #ay %on%e*ned #!th o* ,o+nd ,y s+%h %ont*a%tMs) een !" any
*e"e*en%e #hatsoee* to s+%h %ont*a%tMs) !s !n%-+ded !n the %*ed!t J In %*ed!t o'e*at!ons a-- 'a*t!es
%on%e*ned dea- !n do%+$ents1 and not !n 2oods1 se*!%es ando* othe* 'e*"o*$an%es to #h!%h the
do%+$ents $ay *e-ate.
Th!s $eans that the ,an. !s o,-!2ed to 'ayl#hatee* the d!s'+tes ,et#een the ,+ye* and the
e6'o*te*. ;o* e6a$'-e1 !n one -ead!n2 %ase1 9!s%o+nt Re%o*ds ,o+2ht 'hono2*a'h *e%o*ds "*o$ an
e6'o*te*. Pay$ent #as ,y -ette* o" %*ed!t !ss+ed ,y Ba*%-ays Ban.. The e6'o*te* de-!e*ed a $!6 o"
%assettes1 e!2ht7t*a%. %a*t*!d2es and othe* non7%ont*a%t+a- 2oods. 9!s%o+nt Re%o*ds t*!ed to 2et an
!nC+n%t!on to sto' Ba*%-ays "*o$ 'ay!n2 +nde* the -ette* o" %*ed!t. The %o+*t *e"+sed.
A Iette* o" %*ed!t !s -!.e a ,!-- o" e6%han2e 2!en "o* the '*!%e o" 2oods. It *an.s as %ash and $+st ,e
hono*ed. No set o"" o* %o+nte*%-a!$ !s a--o#ed to det*a%t "*o$ !t. The e6'o*te* #!-- ,e 'a!dl
a-tho+2h -ate* a%t!on !n the %o+*ts $ay o,-!2e h!$ to $a.e 2ood any da$a2e he has %a+sed the
,+ye*.
,trict ompliance
The ,+ye* a-so has a sa"e2+a*dB the ,an. #!-- 'ay on-y !" the sh!''!n2 do%+$ents a*e e)actly !n -!ne
#!th the ,+ye*Hs !nst*+%t!ons. ;o* e6a$'-e1 -etHs say an ;OB sa-es %ont*a%t a2*ees that the e6'o*te*
%an de'os!t the 2oods !n a #a*eho+se !" the sh!' a**!es -ate and that th!s %o+nts as de-!e*y. Th!s
a2*ee$ent has no d!*e%t ,ea*!n2 on the -ette* o" %*ed!tB !" the -ette* o" %*ed!t *e>+!*es a ,!-- o" -ad!n2
and $a.es no $ent!on o" a #a*eho+se *e%e!'t1 then the ,an. s!$'-y %annot 'ay a2a!nst a #a*eho+se
*e%e!'t.
Ban.s $+st "o--o# the!* !nst*+%t!ons st*!%t-y1 as !s sho#n !n anothe* -and$a*. %ase. 9a#son ,o+2ht
an!--a ,eans "*o$ Indones!a. 9a#son !nst*+%ted an A$e*!%an ,an. to o'en a -ette* o" %*ed!t. One o"
the *e>+!*ed sh!''!n2 do%+$ents #as a %e*t!"!%ate o" >+a-!ty !ss+ed 5,y e6'e*ts.K The ,an. 'a!d the
e6'o*te*. The ,eans1 #hen they a**!ed1 #e*e *+,,!sh. The %e*t!"!%ate o" >+a-!ty #as s!2ned1 ho#ee*1
,y on-y one Ke6'e*t.K Th+s1 ,e%a+se the ,an. had not st*!%t-y "o--o#ed the !nst*+%t!ons "*o$ 9a#son1
!t %o+-d not %o--e%t "*o$ 9a#son the $oney !t had 'a!d to the e6'o*te*lan e6'ens!e $!sta.e "o*
the ,an..
Ho# o"ten do ,an.s *e"+se 'ay$ent& A%%o*d!n2 to B*ad2ate1 Koe* ()n o" do%+$ents '*esented to
,an.s +nde* do%+$enta*y %*ed!t t*ansa%t!ons a*e *eCe%ted on "!*st '*esentat!onK. ;!2+*es >+oted to the
a+tho* ,y ,an.s !n so$e A"*!%an %o+nt*!es 2o $+%h h!2he*B so$e ,an.s *e'o*t *eCe%t!n2 @)n o" "!*st
a''-!%at!ons "o* 'ay$ent +nde* -ette* o" %*ed!t.
What ha''ens #hen a ,an. *e"+ses to 'ay +nde* a -ette* o" %*ed!t&
;!*st the ,an. #!-- %!te a Kd!s%*e'an%y1K so$e as'e%t o" the do%+$entat!on that !s not !n -!ne #!th the
te*$s o" the %*ed!t. A %he%.-!st o" %o$$on-y %!ted d!s%*e'an%!es $a.es de'*ess!n2 *ead!n2.
On%e the ,an. has !nd!%ated the d!s%*e'an%!es1 the e6'o*te* %an '*o%eed !n one o" th*ee #aysB
7 P*o!de the $!ss!n2 'a'e*#o*. o* %o**e%t e**o*sm
7 As. the ,+ye* to !nst*+%t the ,an. to %han2e the te*$s o" the Iette* o" %*ed!t7 !.e.1 to !ss+e an
amen+rnentp
m As. the ,an. to '*o%ess the -ette* o" %*ed!t "it* the d!s%*e'an%!es ,+t to 'ay on-y #hen Mand !") the
!ss+!n2 ,an. 'e*$!ts 'ay$ent.
I"1 as o"ten ha''ens1 the -ette* o" %*ed!t !s nea* !ts e6'!*y date. The*e $ay ,e no t!$e "o* the e6'o*te*
to '*o!de the $!ss!n2 '*!%es. In th!s %ase1 the e6'o*te* Mo* the ad!s!n2 ,an.) $+st %onta%t the ,+ye*
as.!n2 the ,+ye* to !nst*+%t the !ss+!n2 ,an. to e6tend the date o" the %*ed!t. Whenee* an
a$end$ent !s ne%essa*y1 the '+*'ose o" the -ette* o" %*ed!t !s -a*2e-y de"eated7lthe ,+ye* !s no#
"!*$-y !n %ont*o- o" 'ay$ent. E6t*a ,an. %osts a*e a "+*the* ,+*den on the e6'o*te*. In 2ene*a-1 t*e
e)porter is a+vise+ to e)ercise scr!p!lo!s care in provi+in$ t*e +oc!mentation calle+ #or by t*e
letter o# cre+it.
9!s%*e'an%!es Re'o*ted ,y Ban.s M'.@0)
P*o,-e$s #!th the Gette* o" C*ed!t
9o%+$ents *e>+!*ed ,y the %*ed!t a*e $!ss!n2.
9o%+$ents *e>+!*ed to ,e s!2ned a*e not s!2ned.
The %*ed!t a$o+nt !s e6%eeded.
The %*ed!t has e6'!*ed. 7
9o%+$ents a*e not '*esented #!th!n the *e>+!*ed t!$e.
Sh!'$ent #as sho*t.
Sh!'$ent #as -ate.
P*o,-e$s #!th the B!-- o" Gad!n2
The ,!-- o" -ad!n2 !s K+n%-eanKl!t has %o$$ents on !t *e-at!n2 to da$a2e to o* othe*
de"!%!en%!es !n the 2oods.
A $a*!ne ,!-- o* -ad!n2 !s *e>+!*ed1 ,+t the ,!-- does not state that the 2oods #e*e Ksh!''ed on
,oa*dK a na$ed esse-.
The ,!-- o" -ad!n2 sho#s sh!'$ent ,et#een 'o*ts othe* than those s'e%!"!ed !n the %*ed!t.
The ,!-- o" -ad!n2 sho#s that the 2oods #e*e sh!''ed on de%.. Th!s !s no*$a--y "o*,!dden
+n-ess the %*ed!t e6'*ess-y a--o#s !!.
The ,!-- o" -add!n2 o""e*s no e!den%e that "*e!2ht #as 'a!d ,y the e6'o*te* M!" th!s #as
*e>+!*ed).
The*e !s no endo*se$ent M!" endo*se$ent !s ne%essa*y).
P*o,-e$s #!th Ins+*an%e
The !ns+*an%e do%+$ent !s not o" the ty'e s'e%!"!ed !n the %*ed!t Me.2.1 a %e*t!"!%ate o"
!ns+*an%e !s '*od+%ed #h!-e the %*ed!t %a--s "o* a 'o-!%y).
The !ns+*an%e *!s.s a*e not those s'e%!"!ed !n the %*ed!t. Th!s !s "o*,!dden +n-ess the %*ed!t
e6'*ess-y a--o#s !t.
The s+$ !ns+*ed !s ,e-o# the "!2+*e *e>+!*ed.
Ins+*an%e %oe* does not ,e2!n on o* ,e"o*e the date o" the t*ans'o*t do%+$ent.
In%ons!sten%!es a$on2 the 9o%+$ents
9!s%*!'t!on o" the 2oods on the !no!%e and !n the %*ed!t a*e d!""e**ent.
We!2hts d!""e* ,eet#een t#o do%+$ents.
Ma*.s and n+$,e*s d!""e* ,et#een t#o do%+$ents.
THE GETTER O; CRE9ITB Con"!*$ed and Un%on"!*$ed
The $e%han!s$ o" the s!$'-est -ette* o" %*ed!t !s th!sB
7 B+ye* !nst*+%ts an Iss+!n2 Ban. to !ss+e a Gette* o" C*ed!t !n "ao* o" the SEGGER.
Be%a+se the ad!s!n2 ,an. !s no*$a--y !n the ,+ye*3s %o+nt*y1 the e6'o*te* -!.es the !ss+!n2 ,an. to
!nst*+%t the ad!s!n2 ,an. !n the e6'o*te*3s o#n %o+nt*y to $a.e a%t+a- 'ay$ents +nde* the -ette* o"
%*ed!t.
7 B+ye* !nst*+%ts an Iss+!n2 Ban. to !nst*+%t an Ad!s!n2 Ban. to 'ay +nde* a Gtte* o" C*ed!t !n "ao*
o" the SEGGER.
I" the ad!s!n2 ,an. .no#s the e6'o*te* #e--1 !t $ay 'ay a-- o" the a-+e o" the %*ed!t 5oe* the
%o+nte*.? B+t s+%h 'ay$ents a*e a-#ays $ade #!th *e%o+*se. W!th *e%o+*se& Get3s say that the
!ss+!n2 ,an. "!nds a '*o,-e$ #!th the do%+$ents and *e"+ses to send "+nds to the ad!s!n2 ,an. to
%oe* 'ay$entm !n that %ase1 the ad!s!n2 ,an. has *e%o+*se to the e6'o*te*. In '-a!n #o*dsB the
ad!s!n2 ,an. 2ets !ts $oney ,a%. "*o$ the e6'o*te*. A %on"!*$!n2 ,an. !s !n a d!""e*ent 'os!t!on. It
!s as.ed to %on"!*$ the %*ed!t.
- B+ye* !nst*+%ts an Iss+!n2 Ban. to !nst*+%t a Con"!*$!n2 Ban. to 'ay +nde* a Gette* o" C*ed!t
!n "ao* o" the SEGGER.
Unde* th!s a**an2e$ent1 the ,an. !n the e6'o*te*3s %o+nt*y %on"!*$s the %*ed!t. A %on"!*$!n2 ,an.
has an a,so-+te o,-!2at!on to 'ay the e6'o*te* a%%o*d!n2 to the te*$s o" the %*ed!t. I" the %*ed!t !s
'aya,-e at s!2ht1 the ,an. 'ays $+st 'ay at s!2ht #!tho+t *e%o+*se. What ha''ens1 tho+2h1 !" the ,an.
'ays the e6'o*te*1 and the !ss+!n2 ,an. "!nds so$eth!n2 #*on2 #!th the do%+$ents& Then the
%on"!*$!n2 ,an.7 not the e6'o*te*7 has a '*o,-e$B !t has 'a!d the $oney to the e6'o*te* and has no
#ay o" *e%oe*!n2 !t. E6'o*te*s '*e"e* th!s a**an2e$ent "o* o,!o+s *easonsm a$on2 the t*ad!t!ona-
t*ad!n2 nat!ons o" the #o*-d1 !t !s the no*$.
Un"o*t+nate-y1 '*o,-e$s %an a*!se #hen e*y s$a-- ,an.s o* ,an.s !n %o+nt*!es #!th see*e "o*e!2n
%+**en%y sho*ta2es t*y to !nst*+%t a ,an. !n the e6'o*te*3s %o+nt*y to %on"!*$ a -ette* o" %*ed!t. Get3s
say the ;*+d2e and A+*2-e Ban. !n Nona$!a as.s S+'e*,an. Inte*nat!ona- !n Ne# :o*. to %on"!*$ a
-ette* o" %*ed!t !n "ao* o" an A$e*!%an e6'o*te* o" %o$'+te*s. I" S+'e*,an. ad!ses the e6'o*te* that
the -ette* o" %*ed!t has ,een o'ened1 and %on"!*$s the %*ed!t1 then S+'e*,an. $+st 'ay the e6'o*te* as
soon as the %o$'+te*s -eae Ne# :o*. ,o+nd "o* Nona$!a.
What ha''ens #hen S+'e*,an. "o*#a*ds the do%+$ents to ;+d2e and A+*2-e and as.s "o* "+nds to
%oe* the 'ay$ent& Pe*ha's noth!n2 at a--. O* 'e*ha's the*e !s a de-ay o" $onths o* een yea*s
,e"o*e the "+nds a**!e. ;o* th!s *eason1 ,an.s a*e so$et!$es *e-+%tant to %on"!*$ -ette*s o" %*ed!t1
es'e%!a--y those "*o$ o,s%+*e ,an.s. O* they $ay as. "o* 5*e%on"!*$at!on?B !n o+* e6a$'-e1 ;+d2e
and A+*2-e $+st "!nd a #e--7.no#n ,an. to %on"!*$ to S+'e*,an. that "+nds #!-- ,e t*ans"e**ed7 !"
not ,y ;+d2e and A+*2-e1 then ,y the 5*e%on"!*$!n2 ,an..? The %osts o" s+%h *e%on"!*$at!on %an ,e
h!2h.
Ho# %an the e6'o*te* ,e s+*e that the -ette* o" %*ed!t !s %on"!*$ed ,y the ,an. !n h!s o#n %o+nt*y&
When the te6t o" the -ette* o" %*ed!t a**!es1 !t %o$es #!th a %oe*!n2 -ette*.
The stand7,y -ette* o" %*ed!t sho+-d a-so ,e $ent!oned at th!s sta2e. Th!s o*!2!nated !n the U.S.
,e%a+se ,an.!n2 -a# !n so$e states "o*,!ds ,an.s to !ss+e 'ay$ent 2+a*antees. Unde* a 'ay$ent
2+a*antee a ,an. a2*ees to 'ay !" the ,+ye* "a!-s to do so. The stand7,y -ette* o" %*ed!t !s set +' !n
e6a%t-y the sa$e #ayB the ,+ye* a2*ees to 'ay !n the no*$a- #ay7 !" the 'ay$ent !s not $ade1 the
e6'o*te* %an ,e a'!d +nde* the stand7,y -ette* o" %*ed!t.
THE AT7SIAHT GETTER O; CRE9IT AN9 THE AGTERNATIDES
When a -ette* o" %*ed!t !s !ss+ed1 the te*$s +nde* #h!%h !t %an ,e 'a!d a*e stated. UCP o""e*s "o+*
%ho!%es1 the "!*st o" #h!%h !s %-ea*-y '*e"e*a,-e "o* the e6'o*te*.
SETTGEMENT B: SIAHT PA:MENT
In th!s a*!at!on1 the e6'o*te* '*esents the ne%essa*y do%+$ents to the 'ay!n2 ,an. Mno*$a--y a
%on"!*$!n2 ,an.)m the ,an. %he%.s the do%+$ents. I" they a*e !n o*de*1 the ,an. 'ays the "+-- "a%e
a-+e o" the -ette* o" %*ed!t. Th!s !s +s+a--y #hat the e6'o*te* #ants. Theo thV -os! nQy1 nhQ / 6+ft
t*[nh %R% %hxn2 ty %|n th!ct %ho n2n hQn2 thanh toRn MthTun2 -Q n2n hQn2 6R% nhZn)m n2n hQn2
nQy sW .!V$ t*a %hxn2 ty. Nc+ %R% %hxn2 ty sO' 6c' Sin2 thx ta Q Sin2 %R% %h! t!ct1 n2n hQn2 sW
thanh toRn toQn ,P 2!R t*\ 2h! t*Nn tjn drn2 thT. y %hjnh -Q -os! $Q nhQ / $on2 SU!.

SETTGEMENT B: 9E;ERRE9 PA:MENT
In sett-e$ent ,y de"e**ed 'ay$ent1 the -ette* o" %*ed!t !s not 'aya,-e +nt!- a n+$,e* o" days M18) days
'e*ha's) a"te* de-!e*y. Pay$ent !s sa"e1 ,+t !t de-ayed. The -ette* o" %*ed!t %annot ,e 'a!d1 ,+t !t has
an o,!o+s a-+eB !" the e6'o*te* needs *eady $oney1 he %an *ea-!Ee so$e 'a*t o" th!s a-+e7 '*o,a,-y
$ost o" !t. The e6a%t "!2+*e he %an d!s%+ss #!th any ,an.. On the "a%e o" !t1 th!s a**an2e$ent !s -ess
adanta2eo+s "o* the e6'o*te* than sett-e$ent ,y 'ay$ent1 ,+t %!*%+$stan%es $ay $a.e s+%h a dea-
ne%essa*y. THANH TON TR CHM. Thanh toRn ,hn2 'hT}n2 thx% t*X %hZ$ -Q -os! GC 'hX! %hu
Scn $Pt s n2Qy M18) n2Qy) sa+ .h! 2!ao hQn2 %hn2 hsn. Thanh toRn nhT thc an toQn nhTn2 thTun2
'hX! $ft thu! 2!an %hu SU!. GC %hTa thanh toRn nhTn2 n_ tn %_ 2!R t*\B nc+ nhQ / %|n t!vn n2ay1
anh ta %_ thV %_ STU% $Pt 'h|n 2!R t*\ 7 %_ .h! STU% %X toQn ,P. Con s %hjnh 6R% -Q ,ao nh!N+ %n
ty Qo .hX nn2 th+yct 'hr% %wa anh ta. Nh[n thoRn2 >+a1 %R%h th+ 6c' nQy jt %_ -U! %ho nhQ /
h}n so d! thanh toRn n2ay1 nhTn2 %_ $Pt s hoQn %Xnh %|n th!ct 'hX! thanh toRn %hZ$.
SETTGEMENT B: ACCEPTANCE
The '*o%ed+*e ta.es '-a%e as "o--o#sB
7 The se--e* '*esents to the a%%e't!n2 ,an. the do%+$ents and a ,!-- o" e6%han2e Mt!$e d*a"t) d*a#n
+s+a--y on the ,+ye*.
7 The a%%e't!n2 ,an. a2*ees to 'ay the ,!-- #hen !t $at+*es.
7 I" the se--e* needs $oney !$$ed!ate-y1 he %an e6%han2e the -ette* o" %*ed!t "o* %ash Mat a d!s%o+nt)
#!th any a2*eea,-e ,an..
So "a* the ,an. has 'a!d %ash to the e6'o*te* a2a!nst the do%+$ents. Anothe* a''*oa%h !s to +se a ,!--
o" e6%han2e. A ,!-- o" e6%han2e !s -!.e a %he%. M%he>+e)m !t a--o#s the ,ene"!%!a*y Mthe e6'o*te*) to
$a.e a d*a"t "o* a 2!en s+$ o" $oney on $e ,+ye*. In !nte*nat!ona- t*ade1 th!s ,!-- o" e6%han2e !s
+s+a--y a t!$e d*a"t l !t %an ,e %o--e%ted on-y a"te* a %e*ta!n date. That !s o,!o+s-y a dan2e* "o* the
e6'o*te*. A%%o*d!n2-y the a%%e't!n2 ,an. #!-- 5a%%e't? the ,!-- o" e6%han2e and a2*ee to 'ay !t at "+--
"a%e a-+e #hen !t "a--s d+e. A ,!-- o" e6%han2e that !s a%%e'ted %an ,e 5ne2ot!ated1? !.e.1 so-s at a
d!s%o+nt to any ,an. !" the e6'o*te* needs *eady $oney.
SETTGEMENT B: NEAOTIATION
The se--e* '*esents to the ne2ot!at!n2 ,an. the do%+$ents and a ,!-- o" e6%han2e d*a#n +s+a--y on
the ,+ye*.
The ne2ot!at!n2 ,an. ne2ot!ates the ,!-- M!.e.1 'ays !t at a d!s%o+nt)
In th!s "!na- $ethod o" sett-e$ent1 the ,an. #!th #ho$ the e6'o*te* dea-s !s %a--ed the ne2ot!at!n2
,an.. In sett-e$ent ,y ne2ot!at!on a ,!-- o" e6%han2e a2a!n a--o#s the e6'o*te* to $a.e a d*a"t on the
,+ye*1 ,+t th!s ,!-- $+st ,e ne2ot!ated7 the ad!s!n2 Mo* othe*) ,an. has no a+tho*!ty to 'ay !t at !ts
"+-- "a%e a-+e. Th!s .!nd o" sett-e$ent !s the -east sat!s"a%to*y "o* the e6'o*te*1 and !n '*a%t!%e !t !s
*a*!ty.
The Letter o" re+it and Its Asso%!ated 9o%+$entat!on
The*e a*e no *+-es as to #hat do%+$ents a -ette* o" %*ed!t $ay o* *nay not *e>+!*e. The ,an. $+st
s!$'-y %he%. that the do%+$ents s'e%!"!ed !n the -ette* o" %*ed!t a*e !n 'e*"e%t o*de*l!t does not
>+est!on the ne%essa*y o* a-+e o" the do%+$entslno* !s !t !nte*ested !n the >+est!on o" #hy the
,+ye* #anted a 'a*t!%+-a* do%+$ent '*esented !n a 'a*t!%+-a* "o*$. The ,an. !s s%*+'+-o+s1
ho#ee*1 !n %he%.!n2 that the do%+$ents a*e %o**e%tm th!s !s the do%t*!ne o" st*!%t %o$'-!an%e.H
The -ette* o" %*ed!t %onta!ns a -!st o" the do%+$ents that the e6'o*te* $+st '*esent. Ea%h
do%+$ent sho+-d ,e %a*e"+--y and %o**e%t-y na$edl KMa*!ne B!-- o" Gad!n2K not s!$'-y KBGK
o* 5B!-- o" Gad!n2.K
The n+$,e* o" o*!2!na-s and the n+$,e* o" %o'!es *e>+!*ed sho+-d ,e st!'+-ated. ;o* e6a$'-e1 K44
Ma*!ne B!-- o" Gad!n2K $eans that the e6'one* $+st '*od+%e th*ee o*!2!na-s and th*ee %o'!es o" the
$a*!ne ,!-- o" -ad!n2. Un-ess the -ette* o" %*ed!t e6'*ess-y states othe*#!se1 the ,an. e6'e%ts a--
do%+$ents to ,e o*!2!na-s. MIt !s Kso$et!$es d!""!%+-t #!th $ode*n do%+$entat!on to de%!de #hat !s
an O*!2!na- and #hat !s a %o'y. Any do%+$ent #h!%h !s a+thent!%ated and #h!%h states that !t !s an
o*!2!na- !s +s+a--y a%%e'ted.)
The ICC s+22ests that do%+$ents a*e -!sted !n a %e*ta!n o*de*B
Co$$e*%!a- !no!%e
T*ans'o*t do%+$ent
Ins+*an%e do%+$ent
Othe* do%+$ents s+%h asB %e*t!"!%ate o" o*!2!n1 %e*t!"!%ate o" ana-ys!s1 'a%.!n2 -!st1 #e!2ht -!st1
'hytosan!ta*y %e**!"!%ate. et%.
Get +s no# -oo. at ea%h o" these do%+$ents1 !n a -!tt-e $o*e deta!- to see #hat the ,an.s a*e -oo.!n2
"o*.
ommercial Invoice
A %o$$e*%!a- !no!%e $+st ,e $ade o+t to the a''-!%ant "o* the -ette* o" %*ed!t Mno*$a--y the ,+ye*)1
+n-ess othe*#!se stated !n the -ette* o" %*ed!t.
The des%*!'t!on o" the 2oods on the !no!%e $+st %on"o*$ #!th the des%*!'t!on !n the -ette* o"
%*ed!t. To ao!d %on"-!%ts !n des%*!'t!on1 !t !s 2ood '*a%t!%e to .ee' the des%*!'t!on !n the -ette* o"
%*ed!t as sho*t as *easona,-y 'oss!,-e. The a$o+nt sho#n on the !no!%e sho+-d not ,e $o*e than
the a$o+nt 'e*$!tted ,y the -ette* o" %*ed!tB !" !t !s1 the ,an. $ay *e"+se to a%%e't the !no!%e.
So$et!$es the ,+ye* *e>+!*es that an !no!%e $+st ,e %e*t!"!ed o* nota*!Eedm !" so1 the -ene* o"
%*ed!t sho+-d state e6a%t-y #hat !s $eant1 "o* e6a$'-e1 #hat. .!nd o" %e*t!"!%at!on $ade ,y #ho$.
The "o--o#!n2 !s an e6a$'-e o" a %o$$e*%!a- !no!%e +s!n2 the SITPRO MUn!ted /!n2do$
S!$'-!"!%at!on o" Inte*nat!ona- T*ade P*o%ed+*es Boa*d) standa*d "o*$.
Transport Doc!ment
When the e6'o*te* 'asses oe* the 2oods to the %a**!e*1 the %a**!e* !ss+es a t*ans'o*t do%+$ent
a''*o'*!ate "o* the 'a*t!%+-a* $eans o" t*ans'o*t !no-ed. The $a!n ty'es a*eB
Sea t*ans'o*tB Ma*!ne ,!-- o" -ad!n2 Mo* sea #ay,!--Hs)
A!* t*ans'o*tB A!* #ay,!--
Ra!- t*ans'o*tB Ra!-#ay %ons!2n$ent note
Road t*ans'o*tB Road %ons!2n$ent note
Co$,!ned t*ans'o*tB Co$,!ned t*ans'o*t ,!-- o" -ad!n2
The -ette* o" %*ed!t sho+-d state the ty'e o" do%+$ent *e>+!*ed. I" a-te*nat!e $eans o" t*ans'o*t o*
'a*t!a- sh!'$ents a*e a--o#ed 'e*ha's ,y d!""e*ent $odes o" t*ans'o*t1 the -ette* o" %*ed!t sho+-d hae
the #o*ds Ko*K Mo* Kando*K) ,et#een the na$es o" the t*ans'o*t do%+$ents.
e.2.B KMa*!ne B!-- o" Gad!n2 ando* Road Cons!2n$ent Note.K
So$e s'e%!a- '*o,-e$s asso%!ated #!th 'a*t!%+-a* t*ans'o*t do%+$ents %an ,e ,*!e"-y h!2h-!2hted
he*e.
,*ipment by ,ea- So$e ty'es o" sea t*ans'o*t a*e not a--o#a,-e
+n-ess the 'a*t!es a2*ee on the$ and -ette* o" %*ed!t !s #o*ded a%%o*d!n2-y. In 'a*t!%+-a*1 t*ans'o*t on
the de%. o" a sh!' o* !n a '+*e sa!-!n2 sh!' a*e not a--o#ed. Th+s1 !" the ,an. sees "*o$ a $a*!ne ,!--
o" -ad!n2 that t*ans'o*t #!-- ta.e '-a%e on de%.1 and !" the -ette* o" %*ed!t does not a--o# th!s1 the ,an.
#!-- *eCe%t the sh!''!n2 do%+$ent.
O"ten a $a*!ne ,!-- o" -ad!n2l#h!%h !s ne$otiable Mse--a,-e) do%+$ent 7!s not ne%essa*yB +s+a--y the
,+ye* does not '-an to *ese-- the 2oods d+*!n27 sh!'$ent. In th!s %ase1 the %a**!e* o"ten !ss+es a sea
#ay,!--1 #h!%h !s s!$!-a* to the "a$!-!a* *oad o* *a!- %ons!2n$ent note.
,*ipment by (ir- The "o*$ o" the a!* #ay,!-- Ma!* %ons!2n$ent note) has ,een standa*d!Eed ,y IATA.
MInte*nat!ona- A!* T*ans'o*t Asso%!at!on). The a!* #ay,!-- !s !ss+ed !n th*ee o*!2!na-s and n!ne %o'!es.
On-y the se%ond o*!2!na- 2oes to the %ons!2nee Mthe ,+ye*).
So$et!$es a -ette* o" %*ed!t %a--s "o* Ka "+-- set o" o*!2!na- a!* #ay,!--sKm th!s !s o,!o+s-y a $!sta.el
Mhe e6'o*te* %annot '*o!de the %o$'-ete setm The ,an.1 ho#ee*1 #!-- "o--o# the #o*d!n2 o" the
-ette* o" %*ed!t e6a%t-y and *e"+se an K!n%o$'-ete set? o" #ay,!--s. Anothe* !n%o**e%t *e>+!*e$ent !s
that the a!* #ay,!-- sho# the date o" the "-!2htB a %o**e%t-y %o$'-eted #ay,!-- %annot sho# th!s
!n"o*$at!on l,+t a2a!n the ,an. $+st !ns!st on st*!%t %o$'-!an%e.
,*ipment by Rail- As #!th the a!* #ay,!--1 -ette*s o" %*ed!t %a--!n2 "o* a *a!- %ons!2n*nent note
o%%as!ona--y $a.e !$'oss!,-e de$ands. The Ko*!2!na- %ons!2n$ent noteK does not %o$e !nto the
'ossess!on o* the e6'o*te*1 so a -ette* o" %*ed!t de$and!n2 the o*!2!na- !s %e*ta!n to %a+se de-ay !n
'ay$ent.
T*e Ins!rance Doc!ment
I" sh!'$ent !s $ade on CI; o* CIP te*$s1 the -ette* o" %*ed!t #!-- %a-- "o* an !ns+*an%e 'o-!%y o*
%e*t!"!%ate. The e6a%t *!s.s to !ns+*ed a*e a-so no*$a--y stated. MI" sh!'$ent !s +nde* In%ot%*$s
othe* $an CI; o* CIP1 the ,+ye* $ay st!-- as. the e6'o*te* to a**an2e so$e as'e%ts o" the !ns+*an%e
"o* h!$. In s+%h %ases1 the -ette* o" %*ed!t %a--s "o* do%+$ents to '*oe that the e6'o*te* has ta.en
the a2*eed ste's.7
Un-ess the -ette* o" %*ed!t states othe*#!se1 !ns+*an%e %oe*ase on a CI; o* CIP sh!'$ent $+st ,e
"o* 11)n o" the CI; Mo* CIP) a-+e o" the 2oodsm !" !t !s not1 ,an.s o"ten *e"+se the !ns+*an%e
do%+$ent.
Ot*er Doc!ments
erti#icate o# Ori$in- By7"a* the $ost %o$$on o" the KOthe* do%+$entsK !s the %e*t!"!%ate o"
o*!2!n. Th!s !s *e>+!*ed "o* !$'o*ts !nto the ,+ye*Hs %o+nt*y +nde* a '*e"e*ent!a- ta*!"" o* othe*
a2*ee$ent. P*o%ed+*es "o* o,ta!n!n2 %e*t!"!%ates o" o*!2!n a*y "*o$ %o+nt*y to %o+nnt*y.
A Cha$,e* o" Co$$e*%e o* %a**!e* %an ad!se yo+.
erti#icate o# Inspection- Many %o+nt*!es1 "o* e6a$'-e Indones!a1 hae "o+nd that the 'assa2e o"
!$'o*ted 2oods th*o+2h the!* o#n %+sto$s !s eas!e* !-K the soods a*e !ns'e%ted and a-+ed !n the
%o+nt*y o" the e6'o*te*. A n+$,e* o" !nte*nat!ona- !ns'e%t!on %o$'an!es1 s'e%!a-!Ee !nB s+%h #o*..K
The So%!ete Aene*ate de S+*e!--an%e MSAS) !s one e6a$'-e. I" SAS !ns'e%t!on !s *e>+!*ed1 the
'a*t!es sho+-d $a.e a note o" th!s e""e%t !n the!* %on*a%t and adC+st !n the de-!e*y s%hed+-e to a--o#
t!$e "o* !ns'e%!!on. O,!o+s-y the deta!-s on the !ns'e%t!on %e*t!"!%ate $+st %o**es'ond e6a%t-y #!th
the deta!-s !n the t*ans'o*t do%+$ent and the %o$$e*%!a- !no!%e. 9!s%*e'an%!es #!-- a-$ost %e*ta!n-y
de-ay !n 'ay$ent.
,pecial Re;!irements- Many %o+nt*!es *e>+!*e %onta!ne*s to ,e "+$!2ated ,e"o*e sh!'$entm othe*s
hae s'e%!a- *e>+!*e$ents a,o+t 'a%.a2!n2 $ate*!a-B "o* %e*ta!n .!nds o" '*od+%ts l "oodst+"" !n
'a*t!%+-a* a hea-th !ns'e%t!on !s ne%essa*ym so$e A"*!%an %o+nt*!es '-a%e see*e *est*!%t!ons on the
!$'o*t o* e6'o*t o" #!-d-!"e o* #!-d-!"e '*od+%ts. These a*e on-y e6a$'-eslthe -!st !s end-ess. In
ea%h %ase the e6'o*te* and the ,+ye* sho+-d !ss+e !t. The deta!-s $+st a''ea* !n the -ette* o" %*ed!tB
a2+e *e>+!*e$ents s+%h as Ka''*o'*!ate #!-d-!"e %e*t!"!%ates? a*e -!.e-y to %a+se de-ay !n 'ay$ent7
the ,an. and the e6'o*te* $ay hae d!""e*ent !e#s on #hat !s 5a''*o'*!ate?.
,!mmary
P*o$'t 'ay$en* o" the -ette* o" %*ed!t de'ends on the e6'o*te* '*esent!n2 %o**e%t do%+$entat!on.
Re$e$,e*7 +' to @)n o" the a''-!%at!ons "o* payment are re:ecte+ beca!se o# +iscrepancies.
Ne2ot!at!n2 the Te*$s o" a Gette* o" C*ed!t
It !s one o" the ,+ye*Hs $a!n d+t!es to '*o!de the -ette* o" %*ed!t. In "a%t1 !" an a2*eed -ette* o" %*ed!t
!s not !ss+ed on t!$e1 the e6'o*te* o"ten has the *!2ht to %an%e- the %ont*a%t ,e%a+se o# a #!n+amental
breac* ,y the ,+ye*.
Un"o*t+nate-y1 $any e6'o*te*s 'ay -!tt-e attent!on to the e6a%t te*$s o" the -ette* o" %*ed!t +nt!- !t !s
too -ate. Us+a--y e6'o*te*s -eae !t to the ,+ye* to apply to h!s ho+se ,an. "o* a -ette* o" %*ed!tB the
,+ye* '*o!des the ,an. #!th o+t-!ne !n"o*$at!on a,o+t the dea-1 and -eaes the ,an. to d*a"t the
-ette* o" %*ed!t as !t sees "!t. Th!s '*o%ed+*e $eets the !nte*ests o" the ,+ye* and the ,an.1 ,+t !t o"ten
-eaes the e6'o*te* #!th se*!o+s heada%hes. Ho# %an the e6'o*te* ,est '*ote%t h!s !nte*ests&
The "!*st ste' !s "o* e6'o*te* and ,+ye* to a2*ee e6a%t-y #hat do%+$entat!on !s *e>+!*ed. So$e
!te$s a*e d!s%*et!ona*y1 "o* !nstan%e the nat+*e o" the t*ans'o*t do%+$ent o* the te*$s o" !ns+*an%e.
Othe* !te$s a*e a $atte* o" 2oe*n$ent *e2+-at!onB the 'hytosan!ta*y %e*t!"!%ate o* %e*t!"!%ate o"
o*!2!n1 "o* e6a$'-e. The t#o 'a*t!es $ay hae to ta-. to the!* Cha$,e*s o" Co$$e*%e1 to the!*
,an.s o* to the %a**!e* to esta,-!sh the %o$'-ete -!st. The "!*st ste' then is ($reement.
On%e the -!st o" do%+$ents has ,een a2*eed. Ste' 0 !s !n%o*'o*at!on o" the -!st !nto the %ont*a%t.
The*e a*e $any #ays o" do!n2 th!s1 one o" #h!%h !s 'a*t!%+-a*-y e""e%t!e. The ICC has '+,-!shed a
"o*$ that the ,+ye* %an +se to a''-y "o* a -ette* o" %*ed!t. In add!t!on to the "o*$1 the ICC has
o""e*ed deta!-ed notes on ho# to %o$'-ete !t. The e6'o*te* and the ,+ye* %an %o$'-ete th!s
a''-!%at!on "o*$ d+*!n2 the!* ne2ot!at!ons1 and a''end a %o'y o" the "o*$ to the!* %ont*a%t. Th!s
"o*$ %an then ,e 'assed to the ,an. as ,peci#ication o" the *e>+!*ed -ette* o" %*ed!t. Th+s1 the
%*ed!t1 #hen !ss+ed1 sho+-d ,e e6a%t-y as a2*eed ,y the 'a*t!es #!th no nasty s+*'*!ses "o* the
e6'o*te*. We #!-- d!s%+ss the "o*$ !n deta!- #hen #e hae $ent!oned the *e$a!n!n2 t#o ste's.
The eri#ication ste' !s an o,!o+s '*e%a+t!onB as soon as the e6'o*te* *e%e!es ad!%e that the
-ette* o" %*ed!t has ,een o'ened1 *e sho+-d %he%. that !t %o$'-!es #!th the a2*ee*nent he ne2ot!ated
#!th the ,+ye*. The dan2e* he*e !s that #hen the ,an. d*a"ts the -ette* o" %*ed!t1 !t -!sts do%+$ents
o* $a.es *e>+!*e$ents that the e6'o*te* e!the* does not +nde*stand o* has not a2*eed to. I$$ed!ate
d!s%+ss!on #!th the ad!s!n2%on"!*$!n2 ,an. !s essent!a- s!n%e a$end$ents a*e a-#ays t!$e
%ons+$!n2. I" the '*o,-e$ !s s'otted ea*-y eno+2h1 ho#ee*1 'ay$ent sho+-d not ,e de-ayed.
And "!na--y ompliance. It %annot ,e sa!d o"ten eno+2h that t!$e-y 'ay$ent de'ends on e6a%t
%o$'-!an%e ,y the e6'o*te* #!th the te*$s o" the %*ed!t.
STEPS IN NEAOTIATINA A GETTER O; CRE9IT
AAREEMENT. The e6'o*te* and the ,+ye* d!s%+ss and -!st a-- *e>+!*ed do%+$entat!on.
INCORPORATION. The -!st !s %o*'o*ated !nto the %ont*a%t.
SPECI;ICATION. The ,+ye* a''-!es "o* the -ette* o" %*ed!t s'e%!"y!n2 the a2*eed
do%+$entat!on.
DERI;ICATION. The e6'o*te* %he%.s the %*ed!t to see that *e>+!*ed do%+$entat!on !sas a2*eed.
COMPGIANCE. The e6'o*te* *!2o*o+s-y %he%.s do%+$entat!on and s+,$!ts !t to the ,an..

Get +s then t+*n to the "o*$ +sed to a''-y "o* a -ette* o" %*ed!t. In '*a%t!%e1 $ost ,an.s hae a
"o*$ o" the!* o#n1 ,+t !t se-do$ d!""e*s #!de-y "*o$ the ICC standa*d.
Se2$ent 1B A''-!%ant
The "+-- na$e and add*ess o" the a''-!%ant M,+ye*)1 !n%-+d!n2 no*$a--y the ,+ye*3s a%%o+nt
n+$,e* #!th the !ss+!n2 ,an..

Se2$ent 0B Iss+!n2 ,an.
The na$e o" the !ss+!n2 ,an.. Th!s %an ,e -e"t ,-an.. I" yo+ o,ta!n an a''-!%at!on "o*$ "*o$ a
,an.1 the na$e !s o"ten '*e'*!nted.
Se2$ent 4B A''-!%at!on 9ate 9ate o" th!s a''-!%at!on.
The date on #h!%h the a''-!%at!on "o*$ !s s+,$!tted to the ,an.. In ne2ot!at!on2 yo+* %ont*a%t1
yo+ %an -eae th!s ,-an..
Se2$ent 8B 9ate and P-a%e o" E6'!*y
A-- %*ed!ts st!'+-ate an e6'!*y dateB !.e.1 the -ast date "o* '*esentat!on o" do%+$ents to the ,an..
Th!s sho+-d ,e %a*e"+--y ne2ot!ated. The ,+ye* #!-- #ant an ea*-y date to sae ,an. %ha*2esm the
e6'o*te* #!-- #ant eno+2h t!$e a"te* de-!e*y to '*esent the do%+$ents and to %o**e%t any
d!s%*e'an%!es that $ay ,e d!s%oe*ed ,y the ,an.. A 5sta-e? Me6'!*ed) -ette* o" %*ed!t #!-- not ,e
'a!d #!tho+t an a$end$ent.
Th!s t!$!n2 de%!s!on sho+-d o,!o+s-y ,e %oo*d!nated #!th the othe* t!$!n2 de%!s!ons on the
%*ed!tB Se2$ent 181 -atest date "o* sh!'$ent1 and Se2$ent 181 the 'e*!od a--o#ed a"te* sh!'$ent
"o* '*esentat!on o" do%+$ents to the ,an..
The '-a%e o" e6'!*y !s o"ten 5At the %o+nte*s o" the %on"!*$!n2 ,an..
Se2$ent 1B Bene"!%!a*y
The "+-- na$e and add*ess o" the ,ene"!%!a*y7 the e6'o*te* !n $ost %ases. MThe ,+ye* !s no*$a--y
s+s'!%!o+s o" anyone othe* than the e6'o*te* ,e!n2 na$ed as ,ene"!%!a*y.) In add!t!on to the
'osta- add*ess1 te-e'hone1 te-e6 and "a6 n+$,e*s a*e so$et!$es !n%-+ded1 es'e%!a--y !" Se2$ent <
*e>+ests te-et*ans$!ss!on.
Se2$ent <B Method o" Iss+e
Iss+e ,y Ma!*)$a!- Iss+e ,y te-et*ans$!ss!on M#h!%h sha-- ,e the o'e*at!e %*ed!t
!nst*+$ent) W!th ,*!e" ad!%e ,y te-et*ans$!ss!on.
Th!s se2$ent dea-s #!th the $ethod o" !ss+!n2 the -ette* o" %*ed!t. In e""e%t the*e a*e t#o %ho!%esB
!ss+e ,y $a!- and !ss+e ,y te-et*ans$!ss!on Mno*$a--y te-e6). The %ho!%e de'ends on the t!$e
aa!-a,-e to the 'a*t!esB !ss+e ,y $a!- !s -!.e-y to ,e $+%h s-o#e* than !ss+e ,y te-e6. I" the
e6'o*te* #ants the ,est o" ,oth #o*-ds1 he %an %*oss t#o ,o6esB Iss!e by mail and Brie# a+vice
by teletransmission. The 5,*!e" ad!%e? !s a not!"!%at!on ,y te-e6 that the %*ed!t has ,een !ss+ed
and !s on !ts #ay ,y $a!-. On th!s ad!%e1 the e6'o*te* $!2ht1 'e*ha's1 ,e2!n '*e'a*at!ons "o*
de-!e*y.
Se2$ent =B T*ans"e* o" the C*ed!t
A t*ans"e*a,-e %*ed!t !s one #h!%h a--o#s the "!*st ,ene"!%!a*y Mthe e6'o*te*) to *e>+est the
%on"!*$!n2 ,an. to 'ay a th!*d 'a*ty. The e""e%t !s that the ,+ye* #!-- not ne%essa*!-y .no# #ho
!s the a%t+a- s+''-!e* o" the 2oods7 #!-- !t ,e ythe e6'o*te* o" the as yet +n.no#n th!*d 'a*ty. In
'*!n%!'-e a -ette* o" %*ed!t !s not 5t*ans"e*a,-e1? ,+t !t %an ,e $ade so ,y %*oss!n2 the a''*o'*!ate
,o6.
Se2$ent 8B Con"!*$at!on
Th!s !s a %*+%!a- !ss+e "o* the e6'o*te*. W!-- the ,an. !n h!s %o+nt*y $e*e-y hand-e the 'a'e*#o*.1
o* #!-- !t $a.e 'ay$ent !tse-" and *e%oe* the "+nds "*o$ the ,+ye*3s ,an.& E6'o*te*s 2*eat-y
'*e"e* %on"!*$at!on.
Se2$ent @B A$o+nt
The a$o+nt o" the %*ed!t sho+-d ,e e6'*essed ,oth !n "!2+*es and !n #o*ds. The %+**en%y o" the
%*ed!t sho+-d ,e stated +s!n2 the ISO MInte*nat!ona- Standa*ds O*2an!Eat!on) %+**en%y %ode1 e.2.1
US9 "o* Un!ted States do--a*s1 ABP "o* 'o+nds ste*-!n21 o* 9EM "o* de+ts%he $a*..
It !s so$et!$es d!""!%+-t to .no# e6a%t-y #hat the "!na- !no!%e "!2+*e #!-- ,e. A%%o*d!n2-y1 $any
%*ed!ts +se #o*ds s+%h as Ka,o+tK o* 5a'o*o6!$ate-y.K In th!s %ase a%t+a- 'ay$ent %an ,e 1)n $o*e
o* 1)n -ess than the stated a$o+nt. MSee UCP A*t!%-e 4@.) Anothe* %o$$on 'h*ase !s K+' toK o* Knot
e6%eed!n2.K Th!s !s +se"+- #hen 'a*t!a- sh!'$ent Mand the*e"o*e 'a*t!a- 'ay$ent) !s not a--o#ed1 ,+t
#hen the "!na- !no!%e $ay ,e "o* %ons!de*a,-y -ess than the stated a$o+nt o" the %*ed!t.
It !s so$et!$es the %ase that so$e 'a*t o" the %ont*a%t '*!%e !s to ,e 'a!d ,y -ette* o" %*ed!t and the
*est ,y so$e othe* $eansl'*e'ay$ent 'e*ha's1 o* 'e*ha's the ,+ye* #!-- *eta!n a 'a*t o" the '*!%e
+nt!- the #a**anty 'e*!od !s oe*. In th!s %ase1 the a''-!%at!on sho+-d state M!n Se2$ent 1@) #hat
'e*%enta2e o" the !no!%e '*!%e !s %oe*ed ,y the %*ed!t.
Se2$ent 1)B Pa*t!a- Sh!'$ent
In '*!n%!'-e1 'a*t!at sh!'$ents a*e a--o#ed +n-ess the 5not a--o#ed? ,o6 !s %*ossed. :o+ sho+-d
d!st!n2+!sh %a*e"+--y ,et#een 'a*t!a- sh!'$ents and sh!'$ent !n !nsta--$ents. Sh!'$ent !n
!nsta--$ents $eans that an a2*eed s%hed+-e has ,een set +' Me.2.1 th*ee e>+a! sh!'$ents !n Ma*%h.
A+2+st and O%to,e* 0))=.) Th!s s%hed+-e sho+-d ,e noted !n HHAdd!t!ona- Inst*+%t!onsK MSe2$ent 1@).
A 'a*t!a- sh!'$ent !s s!$'-y an !n%o$'-ete sh!'$ent #!th so$e 'a*t o" the 2oods to "o--o# -ate*.
Un-ess the ,+ye* has so$e %-ea* *eason "o* #!sh!n2 a-- the 2oods to a**!e to2ethe*1 'a*t!a- sh!'$ent
sho+-d ,e Ka--o#ed.K
Se2$ent 11B Transs*ipment
T*anssh!'$ent $eans $o!n2 the 2oods "*o$ one %oneyan%e to anothe*. Conta!ne* t*ans'o*t
MK%o$,!ned t*ans'o*t) o,!o+s-y '*es+$es t*anssh!'$ent. It !s on-y #hen 2oods t*ae- ,y sea +nde*
a sea. #ay,!-- o* $a*!ne ,!-- o" -ad!n2 that !t $a.es sense to "o*,!d t*anssh!'$ent7 and een then
the*e #o+-d hae to ,e s'e%!a- *easons "o* the '*oh!,!t!onB e6t*e$e "*a2!-!ty o" the 2oods #o+-d ,e
one e6a$'-e. No*$a--y t*anssh!'$ent !s a--o#ed.
Se2$ent 10B (vailability
C*ed!t aa!-a,-e #!-h
,y s!2ht 'ay$ent ,y a%%e'tan%e ,y ne2ot!at!on
,y de"e**ed 'ay$ent
a2a!nst the do%+$ents deta!-ed he*e!n
and ,ene"!%!a*yHs d*a"t at J
on JJ
KC*ed!t aa!-a,-e #!th...Kl th!s !s so$et!$es "o--o#ed ,y the na$e o" the ad!s!n2 ,an. %hosen ,y
the e6'o*te*. Mo*e o"ten !t !s -e"t ,-an.. In th!s %ase1 the !ss+!n2 ,an. !s "*ee to de%!de #h!%h ,an.
#!-- a%t "o* !t !n the e6'o*te*Hs%o+nt*y.
The a*!o+s ty'es o" 'ay$ent a*e d!s%+ssed a,oe. ;o* the e6'o*te*1 K,y s!2ht 'ay$entK !s $ost
adanta2eo+sB as soon as the ,an. has Ks!2htK o" the do%+$ents1 !.e.. as soon as the e6'o*te* '*esents
the$1 !t 'ays.
So$et!$es1 tho+2h not o"ten1 the ,ene"!%!a*y Me6'o*te*) $+st $a.e a d*a"t on the ,an. to %o--e%t the
$oney. In th!s %ase the ,o6 Kand ,ene"!%!a*y3s d*a"t is %*ossed1 the #o*d KatK !s "o--o#ed ,y Ks!2htK
Mo* 'oss!,-y so$e n+$,e* o" days)m the #o*d KonK !s "o--o#ed ,y Kno$!nated ,an..K
Se2$ent 14B Ins!rance overe+ by t*e B!yer
!ns+*an%e #!-- ,e %oe*ed ,y +s
Th!s ,o6 !s K"o* !n"onnat!on on-yKl!t s!$'!y %-a*!"!es that !ns+*an%e !s ta.en %a*e o" K,y +s1K !.e.1 ,y
the ,+ye*. The ,o6 !s no*$a--y %he%.ed #hen the de-!e*y te**n !s ;OB1 C;R o* so$e othe* te*$
#he*e the e6'o*te* !s not *e>+!*ed to '*esent an !ns+*an%e do%+$ent.
Se2$ent 18B Transport In#ormation
Goad!n2 on ,oa*d d!s'at%h1 ta.!n2 !n %ha*2e at "*o$
not -ate* than "o* t*ans'o*tat!on toB
Th!s se2$ent !n%-+des the Kd!s'at%h "*o$..."o* t*ans'o*tat!on to...K !n"o*$at!on and the -atest date o"
sh!'$ent.
In stat!n2 #he*e the 2oods #!-- t*ae- #rom and #he*e they #!-- t*ae- to, the 'a*t!es sho+-d a2*ee
'*e%!se '-a%eslha*,o*s1 a!*'o*ts1 and so on.
Aene*a-!Eed *e"e*en%es s+%h as KUS East Coast Po*tK a*e so$et!$es +sed. A"te* Kno -ate* than1K the
'a*t!es sho+-d ente* a "!na- de-!e*y date. I" they do not 1 then the date o" e6'!*y o" the %*ed!t !s.
ta.en to ,e the "!na- de-!e*y date. So$et!$es the "o*$+-a Kno* -ate* thanK does no% ade>+ate-y
state the a2*eed de-!e*y t!$e. In that %ase1 the #o*ds sho+-d ,e de-eted and othe*s s+,st!t+ted1
s+%h as Kd+*!n2 May 0))=K o* Knot ,e"o*e 0)th May 0))= and not a"te* 08th J+ne 0))=.K
Th!s t!$!n2 de%!s!on sho+-d ,e %oo*d!nated #!th the othe* t!$!n2 de%!s!ons on the %*ed!t Se2$ent
8m da*e o" e6'!*y1 and Se2$ent 181 the 'e*!od a--o#ed a"te* sh!'$ent "o* '*esentat!on o" do%+$ents
to the ,an..
Se2$ent 1(B Description o# t*e ?oo+s
Aoods M,*!e" des%*!'t!on #!tho+t e6%ess!e deta!-) .
The 2oods des%*!'t!on sho+-d ,e .e't as ,*!e" as 'oss!,-e. The $o*e %o$'-!%ated the des%*!'t!on1 the
$o*e %han%e the*e !s o" a d!s%*e'an%y #!th so$e othe* do%+$entlthe !ns'e%t!on %e*t!"!%ate o* the
%o$$e*%!a- !no!%e1 "o* e6a$'-e. .
Q+ant!t!es a*e so$et!$es stated !n s'e%!"!% te*$sB K4) 6 872a--on d*+$s1K "o* e6a$'-e. In th!s %ase
the ,an. %he%.s the do%+$ents to ens+*e that the e6a%t >+ant!ty has ,een sh!''ed. I" the te*$s a*e
-ess s'e%!"!% M5() tons o" 2*ade 4 sand1K to* e6a$'-e)1 then the ,an. a--o#s a to-e*an%e o* (n e!the*
#ay +n-ess the %*ed!t e6'*ess-y e6%-+des a-- to-e*an%es. Een $o*e a2+e1 the %*ed!t $ay state the
>+ant!ty as Ka,o+t () tons? o* 5nea*-y () tons.K In th!s %ase the ,an. a--o#s a 1)n to-e*an%e ,e"o*e
*e"+s!n2 'ay$ent.
To date1 +se o" the Standa*d Inte*nat!ona- T*ade C-ass!"!%at!on Code o" the Ha*$on!Eed Syste$
Code #h!%h a--o%ate %ode n+$,e*s to s'e%!"!% '*od+%ts !s *a*e !n -ette*s o" %*ed!t.
Se2$ent 1<B In%ote*$Ms)
;OB C;R CI; Othe* te*$sB JJ.
Th*ee ,o6es he*e s'e%!"y the $ost %o$$on te*$s o* t*adeB ;OB1 C;R and CI;. In ea%h %ase1 the
na$e o" a '-a%e $+st ,e added !n 'a*en*theses. I" any In%ote*$ !s +sed1 !t sho+-d ,e 2!en !n "+--.
;o* deta!-s see Se%t!on < a,oe.
Se2$ent 1=B Doc!ments
The a''-!%at!on "o*$ -eaes the s'a%e #he*e do%+$ents a*e to ,e -!sted #!tho+t a head!n2 o" any
so*t. MThe *eason to* th!s o$!ss!on !s not %-ea*.)
9o%+$ents sho+-d ,e -!sted !n the *e%o$$ended o*de*. I" the*e !s not eno+2h s'a%e1 add!t!ona- 'a2es
$ay ,e added.
Co$$e*%!a- Ino!%e
T*ans'o*t 9o%+$ent
Ins+*an%e 9o%+$ent
;+*the* do%+$ents
Se2$ent 18B Presentation Perio+
A"te* the t*ans'o*t do%+$ent !s !ss+ed M!.e.. a"te* the 2oods a*e sh!''ed1 the e6'o*te* needs so$et!$e
to %o--e%t the *e>+!*ed do%+$ents1 to '*e'a*e the$ and to '*esent the$ to the ,an.. Most ,+ye*s "!6 a
$a6!$+$ t!$e ,et#een sh!'$ent and '*esentat!on. I" th!s ,o6 !s -e"t e$'ty1 the UCP MA*t!%-e 84)
a+to$at!%a--y a--o#s 01 days1 and that $ay ,e ta.en a a no*$a- "!2+*e.
Th!s t!$!n2 de%!s!on sho+-d ,e %oo*d!nated #!th othe* t!$!n2 de%!s!onsB Se2$ent 81 date o" de-!e*y1
and Se2$ent 181 -atest date "o* sh!'$ent.
Se2$ent 1@B (++itional Instr!ctions
Ty'!%a- Kadd!t!ona- !nst*+%t!onsK !n%-+de a state$ent o" the 'e*%enta2e o"
the !no!%e '*!%e %oe*ed ,y the %*ed!t !" th!s !s -ess than 1))n Madd!nona- to Se2$ent @)1 o* the
de-!e*y s%hed+-e !" de-!e*y !s !n !nsta--$ents Madd!t!ona- to Se2$ent 18).
Se2$ent 0)B (!t*oriration to Debit
3e a!t*orire yo! to +ebit o!r acco!nt
Th!s se2$ent !s the ,+ye*Hs *es'ons!,!-!ty a-one. No*$a--y noth!n2 !s added he*e. I"1 ho#ee*1 the
,+ye*Hs a%%o+nt n+$,e* !s not $ent!oned +nde* Ka''-!%antK !n Se2$ent 11 !t $ay ,e stated a"te* the
#o*d Ka%%o+nt.K
Se2$ent 01B ,i$nat!re
Na$e1 sta$' and a+tho*!Eed s!2nat+*eMs) o" the a''-!%ant
The ,+ye* s!2ns and sta$'s the "o*$.
C21E 1-0D7:
<E--IN< +2ID
In ea%h s!t+at!on ,e-o#1 de%!de the $ost a''*o'*!ate $ethod o" 'ay$ent.
MA) Con"!*$ed GC MB) No se%+*!ty o'en a%%o+nt
MC) Ban. 2+a*antee o'en a%%o+nt M9) E6'o*t !ns+*an%e o'en a%%o+nt
1. Sa-e o" a ,a-e M*o--) o" %-oth %ost!n2 k0)) to a nea*,y ta!-o*3s sho' #!th #ho$ yo+ hae done
,+s!ness "o* 0) yea*s.
0. A ne# s$a-- %+sto$e* !n a Pa%!"!% !s-and *e'+,-!% $+%h 2!en to 'o-!t!%a- d!st+*,an%es. The o*de*
!s "o* k1)1))) #o*th o" asso*ted te6t!-es.
4. A %ont*a%t "o* s+''-y o" %-oth #o*th k(1))) 'e* $onth to the 2oe*n$ent o" O%eanea7 a
'*os'e*o+s %o+nt*y. 9+*at!on o" the %ont*a%tB t#o yea*s1 ,+t *ene#a,-e. Cont*a%t *e'*esents 0(.(n o"
t+*noe*.
8. The sa$e dea- as M4) e6%e't that the %ont*a%t *e'*esents on-y ).(n o" yo+* t+*noe*.
1. O'en a%%o+nt1 no se%+*!ty 0. Con"!*$ed GC
4. I" 'oss!,-e a ,an. 2+a*antee. Othe*#!se e6'o*t %*ed!t !ns+*an%e.
8. E6'o*t %*ed!t !ns+*an%e !s ad!sa,-e. Se--!n2 on o'en a%%o+nt #!th no se%+*!ty at a-- !s a-so
'oss!,-e.
E0,ICIT L.<. The e%port flow6 decision chart App. <EL@=B
;URTHER REA9INA
INC3-ERM1 %@1@
The ne# INCOTERMS 0)1) ,e%a$e e""e%t!e Jan+a*y 11 0)11. In%ote*$s77#h!%h !s an a,,*e!at!on
"o* Inte*nat!ona- Co$$e*%!a- te*$s77a*e a se*!es o" sa-es te*$s. They a*e '+,-!shed ,y the
Inte*nat!ona- Cha$,e* o" Co$$e*%e MICC) and a*e #!de-y +sed !n %o$$e*%!a- t*ansa%t!ons.
In add!t!on to '*o!d!n2 a set o" *+-es "o* the !nte*'*etat!on o" %o$$on-y +sed t*ade te*$s1
INCOTERMS 0)1) a%%o$'-!sh the "o--o#!n2B Ma) s!2n!"!%ant-y *e!ses A*o+' 9 -!sted !n
INCOTERMS 0)))m M,) *ed+%e In%ote*$s "*o$ "o+* 2*o+'s to t#o 2*o+'s1 a--o#!n2 t*ade e6'e*ts to
%hoose the $ost s+!ta,-e *+-e *e-ated to the $ode o" t*ans'o*tm and M%) *ed+%e the a,so-+te n+$,e* o"
In%ote*$s "*o$ 14 to 11.
Mo*eoe*1 INCOTERMS 0)1) o""e* add!t!ona- 2+!dan%e #h!%h ass!sts +se*s !n se-e%t!n2 the $ost
a''*o'*!ate In%ote*$ "o* ea%h t*ansa%t!on. The *e!sed te*$s a-so s'e-- o+t *+-es *e2a*d!n2 the +se o"
e-e%t*on!% '*o%ed+*esm deta!- !n"o*$at!on on se%+*!ty7*e-ated %-ea*an%es "o* sh!'$entsm and o""e*
ad!%e #!th *es'e%t to do$est!% t*ade.
:.at are InotermsZ
In%ote*$s o* Inte*nat!ona- Co$$e*%!a- te*$s a*e a se*!es o" sa-es te*$s. They a*e '+,-!shed ,y the
Inte*nat!ona- Cha$,e* o" Co$$e*%e MICC) and a*e #!de-y +sed !n !nte*nat!ona- %o$$e*%!a-
t*ansa%t!ons. The '+*'ose o" In%ote*$s !s to '*o!de a set o" !nte*nat!ona- *+-es "o* the !nte*'*etat!on
o" %o$$on-y +sed t*ade te*$s !n !nte*nat!ona- t*ansa%t!ons. They %-ose-y %o**es'ond to the U.N.
Conent!on on Cont*a%ts "o* the Inte*nat!ona- Sa-e o" Aoods. The "!*st In%ote*$s #e*e !ss+ed !n
1@4<. The $ost *e%ent In%ote*$s #e*e +'dated !n 0)1) and ,e%a$e e""e%t!e Jan+a*y 11 0)11.
:.o nee=s to 9n=erstan= InotermsZ
Aoe*n$ent t*ade o""!%!a-s as #e-- as $any '*!ate se%to* 'a*t!es sho+-d +nde*stand In%ote*$s. S+%h
'*!ate se%to* 'a*t!es !n%-+deB e6'o*te*s1 !$'o*te*s1 t*ade "!nan%e '*o"ess!ona-s1 e6'o*t %o$'-!an%e
s'e%!a-!sts1 %+sto$s ,*o.e*s1 "*e!2ht "o*#a*de*s1 !ns+*e*s1 !nte*nat!ona- %*ed!t '*o"ess!ona-s1 and sa-es
and '+*%has!n2 $ana2e*s.
:.at are Inoterms 9se= forZ
In%ote*$s ass!st t*ade '*a%t!t!one*s !n !nte*'*et!n2 the $ost %o$$on-y +sed !nte*nat!ona- t*ade te*$s.
Us!n2 %o**e%t In%ote*$s !n an !nte*nat!ona- t*ansa%t!on *ed+%es %ons!de*a,-y +n%e*ta!nt!es a*!s!n2
"*o$ the d!""e*ent !nte*'*etat!on o" s+%h te*$s !n d!""e*ent %o+nt*!es.
They a''o*t!on !nte*nat!ona- t*ade t*ansa%t!on %osts and *es'ons!,!-!t!es ,et#een ,+ye*s M!$'o*te*s)
and se--e*s Me6'o*te*s) and *e"-e%t $ode*n7day t*ans'o*tat!on '*a%t!%es.
In%ote*$s ass!st !n s!2n!"!%ant-y *ed+%!n2 $!s+nde*stand!n2s a$on2 t*ade*s and the*e,y $!n!$!E!n2
t*ade d!s'+tes and -!t!2at!on. Ho#ee*1 the!* s%o'e !s -!$!ted to $atte*s *e-ated to the !nte*nat!ona-
*!2hts and o,-!2at!ons o" the 'a*t!es !no-ed !n the %ont*a%t o" sa-e #!th *es'e%t to the de-!e*y o" the
2oods so-d. Th+s1 they a''-y to the %ont*a%t o" %a**!a2e1 not the %ont*a%t o" sa-e.
:.$ )ere t.e INC3-ERM1 %@@@ re&ise=Z
INCOTERMS 0)1) a*e the +'dated e*s!on o" INCOTERMS 0))). INCOTERMS 0)1) hae ,een
dee-o'ed as a *es+-t o" an e6tens!e *e!e# o" %+**ent sh!''!n2 '*a%t!%es and t*ends !n an e""o*t to
.ee' +' #!th the *a'!d e6'ans!on o" #o*-d t*ade.
The .ey d*!e*s "o* th!s +'date !n%-+deB a need "o* !$'*oed %a*2o se%+*!ty1 %han2es to the Un!"o*$
Co$$e*%!a- Code !n 0))8 that *es+-ted !n a de-et!on o" U.S. sh!'$ent and de-!e*y te*$s1 and ne#
t*ends !n 2-o,a- t*ans'o*tat!on.
5o) =o INC3-ERM1 %@1@ =iffer from INC3-ERM1 %@@@Z
In add!t!on to '*o!d!n2 a set o" *+-es "o* the !nte*'*etat!on o" %o$$on-y +sed t*ade te*$s1
INCOTERMS 0)1) s!2n!"!%ant-y *e!se A*o+' 9 -!sted !n INCOTERMS 0))).
The "!e INCOTERMS 0))) -!sted !n A*o+' 9 !n%-+ded the "o--o#!n2B
D2( 9e-!e*ed At ;*ont!e*
DE1 9e-!e*ed E6 Sh!'
DE/ 9e-!e*ed E6 Q+ay
DD0 9e-!e*ed 9+ty Un'a!d
DD+ 9e-!e*ed 9+ty Pa!d
INCOTERMS 0)1) %onta!n the "o--o#!n2 %ate2o*!esB
D2- 9e-!e*ed At Te*$!na-
D2+ 9e-!e*ed At P-a%e
DD+ 9e-!e*ed 9+ty Pa!d
Mo*eoe*1 INCOTERMS 0)1) *ed+%e the n+$,e* o" In%ote*$ 2*o+'!n2s "*o$ "o+* to t#o1
a--o#!n2 t*ade e6'e*ts to %hoose the $ost s+!ta,-e *+-e *e-ated to the $ode o" t*ans'o*t.
The 14 INCOTERMS 0))) %onta!ned "o+* essent!a- %ate2o*!es o" In%ote*$s. They #e*eB
A*o+' E 9e'a*t+*e
A*o+' ; Ma!n %a**!a2e +n'a!d
A*o+' C Ma!n %a**!a2e 'a!d
A*o+' 9 A**!a-.
The t#o $a!n %ate2o*!es o" INCOTERMS 0)1) a*e no# o*2an!Eed ,y $odes o" t*ans'o*t. Used !n
!nte*nat!ona- as #e-- as !n do$est!% %ont*a%ts "o* the "!*st t!$e1 the ne# 2*o+'s a!$ to s!$'-!"y the
d*a"t!n2 o" %ont*a%ts and he-' ao!d $!s+nde*stand!n2s ,y %-ea*-y st!'+-at!n2 %e*ta!n o,-!2at!ons o"
,+ye*s and se--e*s.
<ro9p 1. Inoterms t.at app#$ to an$ mo=e of transport are:
EB: E6 Wo*.s
(C2 ;*ee Ca**!e*
C+- Ca**!a2e Pa!d To
CI+ Ca**!a2e And Ins+*an%e Pa!d To
D2- 9e-!e*ed At Te*$!na-
D2+ 9e-!e*ed At P-a%e
DD+ 9e-!e*ed 9+ty Pa!d
<ro9p %. Inoterms t.at app#$ to sea an= in#an= )ater)a$ transport on#$:
(21 ;*ee A-on2s!de Sh!'
(34 ;*ee On Boa*d
C(R Cost And ;*e!2ht
CI( Cost1 Ins+*an%e1 and ;*e!2ht
;+*the*1 the t#o ne# 2*o+'!n2s -!sted a,oe note a *ed+%t!on o" the n+$,e* o" In%ote*$s "*o$ 14 to
11.
;!na--y1 INCOTERMS 0)1) '*o!de add!t!ona- he-'"+- 2+!dan%e and %-a*!"y o,-!2at!ons. ;o*
!nstan%e1 the *e!sed te*$s a-so s'e-- o+t *+-es *e2a*d!n2 the +se o" e-e%t*on!% '*o%ed+*esm deta!-
!n"o*$at!on on se%+*!ty7*e-ated %-ea*an%es "o* sh!'$entsm and o""e* ad!%e #!th *es'e%t to do$est!%
t*ade.
Can I sti## 9se t.e INC3-ERM1 %@@@Z
A%%o*d!n2 to the Inte*nat!ona- Cha$,e* o" Co$$e*%e1 a-- %ont*a%ts $ade +nde* INCOTERMS
0))) *e$a!n a-!d een a"te* 0)11. In add!t!on1 a-tho+2h the ICC *e%o$$ends +s!n2 INCOTERMS
0)1) a"te* 0)111 'a*t!es to a %ont*a%t "o* the sa-e #!th *es'e%t o" the de-!e*y o" 2oods %an a2*ee to
+se any e*s!on o" In%ote*$s a"te* 0)11. It !s !$'o*tant1 ho#ee*1 to %-ea*-y s'e%!"y the %hosen
e*s!on INCOTERMS 0)1)1 INCOTERMS 0)))1 o* any ea*-!e* e*s!on.
:.ere an I o"tain a op$ of t.e ne) INC3-ERM1 %@1@Z
:o+ %an '+*%hase a %o'y o" the ne# INCOTERMS 0)1) "*o$ the ICC #e,s!te.
:.ere an I #earn more a"o9t t.e ne) InotermsZ
The*e a*e a n+$,e* o" '*!ate se%to* and 2oe*n$ent o*2an!Eat!ons that o""e* #o*.sho's1 #e,!na*s1
and se$!na*s *e-ated to the ne# In%ote*$s. ;o* #e,!na*s and othe* eents *e-ated to In%ote*$s and
$any othe* to'!%s o" t*ade%*a"t ed+%at!on that a*e ,e!n2 o""e*ed ,y the U.S. Co$$e*%!a- Se*!%e and
!ts 'a*tne*s !n s+''o*t o" the P*es!dent3s Nat!ona- E6'o*t In!t!at!e1 yo+ $ay !s!t o+* T*ade Eents
Sea*%h 9ata,ase.
INCOTERMS AND THE EXPORTER

+nternationa% Commer)ia% TermsF no5n as -+n)oterms0F are internationa%%' a))epted terms
defining the responsi4i%ities of exporters and importers in the arrangement of shipments and
the transfer of %ia4i%it' in&o%&ed at &ario/s stages of the transa)tion! +n)oterms do not )o&er
o5nership or the transfer of tit%e of goods! +t is )r/)ia% to agree on an +n)oterm at the start of
a negotiationIJ/otation of a sa%eF as it 5i%% affe)t the )osts and responsi4i%ities in&o%&ed in
shippingF ins/ran)e and tariffs! The ne5 +n)oterms "D1D r/%es 5ere re&ised 4' the
+nternationa% Cham4er of Commer)e and 5i%% 4e)ome effe)ti&e 7an/ar' 1F "D11! 8o/r terms
5ere e%iminated ($A8F $EQF $E;F $$9) and t5o 5ere added: $e%i&ered at (%a)e ($A()
and $e%i&ered at Termina% ($AT)!
The modifi)ations affe)t o4%igationsF ris transferF and )ost sharing for the se%%er and 4/'erF
res/%ting in 4etter )%arifi)ation and app%i)ation of the e%e&en (11) +n)otermsF and )onsistent
5ith the 5a' g%o4a% trade is a)t/a%%' )ond/)ted sin)e the %ast /pdate in "DDD!
+n an' sa%es transa)tionF it is important for the se%%er and 4/'er to agree on the terms of sa%e
and no5 pre)ise%' 5hat is in)%/ded in the sa%e pri)e! Exporters sho/%d )hoose the +n)oterm
that 5ors 4est for their )ompan'F 4/t a%so 4e prepared to J/ote on other terms!
;ee VE$( 8ast8a)ts- Responding to +nJ/iries
+nexperien)ed exporters ma' 5ant to /se the +n)oterm -Ex Kors0 (ELK)F 4e)a/se this
term )arries the %east 4/rden for them! 9nder ELKF an exporterMs responsi4i%it' ends at
their fa)i%it'Ms %oading do)F 5hi)h in)%/des maing the goods a&ai%a4%e for pi) /p and
pro&iding an' prod/)t information needed for fi%ing the E%e)troni) Export +nformation (EE+)!
The importerMs agent (i!e! their designated 9!;! freight for5arder) 5i%% arrange and pa' for
the pre-)arriageF shippingF ins/ran)e and an' additiona% )osts from the exporterMs door! A
sa%e 4ased on the +n)oterm -C+80F on the other handF reJ/ires the exporter to arrange and
pa' for the pre-)arriageF shippingF and ins/ran)e to a named port! +n this )aseF the sa%e
pri)e (in&oi)e) in)%/des not on%' the (C)ost of goodsF 4/t a%so (+)ns/ran)e and (8)reight
)osts that the importing 4/'er pa's the exporting se%%er!
Khen designating the +n)oterm on a )ommer)ia% in&oi)e or a J/otation to the 4/'erF the
term sho/%d 4e fo%%o5ed 4' the )it' or port of %oadIdis)hargeF s/)h as -ELK 8a)tor'F
Ri)hmondF VA0 or -C+8 Rotterdam0! 9sing the a)t/a% address is 4etter to a&oid an'
)onf/sion or misinterpretation! Comm/ni)ation thro/gho/t the entire pro)ess is )r/)ia%! 8or
examp%eF /nder Ex KorsF the shipper sho/%d notif' the importer 5hen the goods are read'
and after the' ha&e 4een pi)ed /p 4' the importerMs se%e)ted )arrier! The exporterMs freight
for5arder often pro&ides the &esse% and sai% dateF or air )argo ser&i)e /sedF and an' o)ean
4i%% of %ading or air5a' 4i%% n/m4er to eep the parties informed of the arrangements and
stat/s of the shipment (e&en tho/gh te)hni)a%%' /nder Ex Kors the exporterMs
responsi4i%it' ends at their %oading do))!
The most 4/rdensome +n)oterm for the exporter is $e%i&ered $/t' (aid ($$()F 4e)a/se a%%
arrangements and )osts are 4orne 4' the exporterF /s/a%%' 5ith the assistan)e of agents
(freight for5arders and )/stoms ho/se 4roers)! Kith $$(F the exporter 4ears a%% riss and
)osts of transportationF in)%/ding d/ties and tariffsF /nti% the goods are re)ei&ed 4' the
importerF /s/a%%' at the importerMs fa)tor' or 5areho/se! ;in)e $$( represents the
maxim/m o4%igation to the se%%erF it is not re)ommended for )ompanies that are ne5-to-
export!
DDP Example: Four palletized drums of chemicals at US !"#"""# DDP $%& 'ain St.#
Santiago# (hile.
+n the $$( examp%eF for N4DFDDD tota%F the exporter arranges and pa's for a%% transit )ostsF
in)%/ding de%i&er' to a designated fa)i%it' at 1"3 Main ;treetF ;antiagoF in)%/ding an'
ins/ran)e )o&erage and d/tiesItariff )harges! Khi%e these )osts are added to the prod/)tMs
pri)e and are sometimes itemiOed on the )ommer)ia% in&oi)eF the exporter taes f/%%
responsi4i%it' for the added %ogisti)s )osts and potentia% heada)hesF s/)h as de%a's at
)/stomsF dem/rrage or detentionF or )hanges in in%and or o)ean transportation )osts!
;hipping $$( sho/%d on%' 4e /sed 4' the most experien)ed exporters! Man' detai%s m/st
4e )onsideredF s/)h as trade 4arriersF d/tiesF )/rren)' ex)hangeF rep/ta4i%it' of ser&i)e
pro&idersF and de%i&er' to the fina% destination! 8or examp%eF if 'o/r prod/)t is a %argeF
)/stom-made pie)e of ma)hiner' for a fa)tor':
Are there %o)a% o/t-of-ga/geF hea&' %ift ser&i)e pro&idersP
$oes the road to the fa)tor' a%%o5 a))ess 4' an o&ersiOed tr/)P
Khat are the dimensions and )apa4i%it' of the 4/'erMs re)ei&ing do)P
Qo5 5i%% 'o/ repair an' damage that ma' o))/r d/ring transitP
INCOTERM DEFINITIONS9CHANGES
The 11 +n)oterms )onsist of t5o gro/ps and are %isted 4e%o5 in order of in)reasing
risI%ia4i%it' to the exporter! 9nder the re&ised termsF 4/'ers and se%%ers are 4eing /rged to
)ontra)t pre)ise%' 5here de%i&er' is made and 5hat )harges are )o&ered! This sho/%d a&oid
do/4%e-4i%%ing of termina% hand%ing )harges at the port of dis)harge! Referen)es to -shipMs
rai%0 5ere taen o/t to )%arif' that de%i&er' means -on-4oard0 the &esse%! +ns/ran)eF
e%e)troni) do)/mentationF and s/pp%' )hain se)/rit' are addressed in more detai%F and
gender-ne/tra% %ang/age is no5 /sed!
R-#e! fo% Se" "n In#"n :"te%5"& T%"n!3o%t/
FAS - 8ree A%ongside ;hip: Ris passes to 4/'erF in)%/ding pa'ment of a%% transportation
and ins/ran)e )ostsF on)e de%i&ered a%ongside the ship (rea%isti)a%%' at named port termina%)
4' the se%%er! The export )%earan)e o4%igation rests 5ith the se%%er!
FOB - 8ree :n .oard: Ris passes to 4/'erF in)%/ding pa'ment of a%% transportation and
ins/ran)e )ostsF on)e de%i&ered on 4oard the ship 4' the se%%er! A step f/rther than 8A;!
CFR - Cost and 8reight: ;e%%er de%i&ers goods and ris passes to 4/'er 5hen on 4oard the
&esse%! ;e%%er arranges and pa's )ost and freight to the named destination port! A step
f/rther than 8:.!
CIF - CostF +ns/ran)e and 8reight: Ris passes to 4/'er 5hen de%i&ered on 4oard the ship!
;e%%er arranges and pa's )ostF freight and ins/ran)e to destination port! Adds ins/ran)e
)osts to C8R!
R-#e! fo% An& Moe o% Moe! of T%"n!3o%t"tion/
EX: - Ex Kors: ;e%%er de%i&ers (5itho/t %oading) the goods at disposa% of 4/'er at se%%erMs
premises! ,ong he%d as the most prefera4%e term for those ne5-to-export 4e)a/se it
represents the minim/m %ia4i%it' to the se%%er! :n these ro/ted transa)tionsF the 4/'er has
%imited o4%igation to pro&ide export information to the se%%er!
FCA - 8ree Carrier: ;e%%er de%i&ers the goods to the )arrier and ma' 4e responsi4%e for
)%earing the goods for export (fi%ing the EE+)! More rea%isti) than ELK 4e)a/se it in)%/des
%oading at pi)-/pF 5hi)h is )ommon%' expe)tedF and se%%ers are more )on)erned a4o/t
export &io%ations!
CPT - Carriage (aid To: ;e%%er de%i&ers goods to the )arrier at an agreed p%a)eF shifting ris
to the 4/'erF 4/t se%%er m/st pa' )ost of )arriage to the named p%a)e of destination!
CIP - Carriage and +ns/ran)e (aid To: ;e%%er de%i&ers goods to the )arrier at an agreed
p%a)eF shifting ris to the 4/'erF 4/t se%%er pa's )arriage and ins/ran)e to the named p%a)e
of destination!
DAT - $e%i&ered at Termina%: ;e%%er 4ears )ostF ris and responsi4i%it' /nti% goods are
/n%oaded (de%i&ered) at named J/a'F 5areho/seF 'ardF or termina% at destination!
$em/rrage or detention )harges ma' app%' to se%%er! ;e%%er )%ears goods for exportF not
import! $AT rep%a)es $EQF $E;!
DAP - $e%i&ered at (%a)e: ;e%%er 4ears )ostF ris and responsi4i%it' for goods /nti% made
a&ai%a4%e to 4/'er at named p%a)e of destination! ;e%%er )%ears goods for exportF not import!
$A( rep%a)es $A8F $$9!
DDP - $e%i&ered $/t' (aid: ;e%%er 4ears )ostF ris and responsi4i%it' for )%eared goods at
named p%a)e of destination at 4/'ers disposa%! ./'er is responsi4%e for /n%oading! ;e%%er is
responsi4%e for import )%earan)eF d/ties and taxes so 4/'er is not -importer of re)ord0!
INCOTERMS DO NOT;
$etermine o5nership or transfer tit%e to the goodsF nor e&oe pa'ment terms!
App%' to ser&i)e )ontra)tsF nor define )ontra)t/a% rights or o4%igations (ex)ept for de%i&er')
or 4rea)h of )ontra)t remedies!
(rote)t parties from their o5n ris or %ossF nor )o&er the goods 4efore or after de%i&er'!
;pe)if' detai%s of the transferF transportF and de%i&er' of the goods! Container %oading is
#:T )onsidered pa)agingF and m/st 4e addressed in the sa%es )ontra)t!
)emember# *ncoterms are not la+ and there is N, default *ncoterm-
3
VEDP International Trade www.exportvirginia.org
[email protected] !"0#$ %#%&%'(#
-rans#ate into >ietnamese
12LE1 2<ENC7 2ND 1ER>ICE1 2<REEMEN-
B: AN9 BETWEEN
1IEMEN1 MEDIC2L 13L0-I3N1 012, INC.,
C-I M3LEC0L2R IM2<IN<, INC.,
AN9
C-I +E- 171-EM1, INC.
May 11 0))8

12LE1 2<ENC7 2ND 1ER>ICE1 2<REEMEN-
THIS AAREEMENT Mth!s KAAREEMENTK) !s ente*ed !nto and e""e%t!e as o" the 1st day o"
May1 0))8 Mthe KE;;ECTIDE 9ATEK) ,y and ,et#een SIEMENS ME9ICAG SOGUTIONS USA1
INC.1 a %o*'o*at!on d+-y o*2an!Eed and e6!st!n2 +nde* the -a#s o" the State o" 9e-a#a*e Mhe*e!na"te*
KSIEMENSK)1 CTI MOGECUGAR IMAAINA1 INC.1 a %o*'o*at!on d+-y o*2an!Eed and e6!st!n2
+nde* the -a#s o" the State o" 9e-a#a*e Mhe*e!na"te* KCTIK)1 and CTI PET S:STEMS1 INC.1 a
%o*'o*at!on o*2an!Eed and e6!st!n2 +nde* the -a#s o" the State o" Tennessee Mhe*e!na"te* KCPSK).
HU' S]n2 nQy M2~! -Q 5HU' S]n2?) STU% .e .ct Q %_ h!`+ -a% .V ty n2Qy 1(0))8 M2~! -Q KN2Qy %_
h!`+ -a%K) 2!qa $Pt ,Nn -Q SIEMENS ME9ICAG SOGUTIONS USA1 INC.1 Tn2 %pn2 ty %_ Sn2
.e hU' 'hR' Q host SPn2 theo -+Zt 'hR' %wa T!V+ ,an2 9e-a#a*e M2~! -Q KSIEMENSK)1 tZ' SoQn
CTI MOGECUGAR IMAAINA1 INC.1 %_ Sn2 .e hU' 'hR' Q host SPn2 theo -+Zt 'hR' %wa T!V+
,an2 9e-a#a*e M2~! -Q KCTIK)1 Q ,Nn .!a -Q CTI PET S:STEMS1 INC.1 %_ Sn2 .e hU' 'hR' Q
host SPn2 theo -+Zt 'hR' %wa T!V+ ,an2 Tennessee M2~! -Q KCPSK).
+RE2M4LE Ph|n $^ S|+
WHEREAS1 CTI A*o+'1 In%.1 CPS1 9*. Te**y 9. 9o+2-ass1 9*. Rona-d N+tt1 M!%hae- C.
C*a,t*ee and J. /e--y M!-a$ and S!e$ens ente*ed !nto a sto%. '+*%hase1 *eo*2an!Eat!on and
Co!nt ent+*e a2*ee$ent Mthe KJOINT DENTURE AAREEMENTK) dated as o" 9e%e$,e* @1 1@8=m
{t [ CTI A*o+'1 In%.1 CPS1 Ts. Te**y 9. 9o+2-ass1 Ts. Rona-d N+tt1 M!%hae- C. C*a,t*ee Q
J. /e--y M!-a$ %n2 S!e$ens .e .ct %R% hU' S]n2 $+a % 'h|n1 tR! t %hx% %R% %pn2 ty Q -!Nn
doanh M2~! -Q KH G!Nn doanhK) .V ty n2Qy @ 10 1@8=m
WHEREAS1 S!e$ens ente*ed !nto an A$ended 9!st*!,+t!on A2*ee$ent #!th CPS e""e%t!e
Ma*%h 11 0))0 '+*s+ant to #h!%h S!e$ens has the *!2ht to d!st*!,+te %e*ta!n o" the '*od+%ts
$an+"a%t+*ed ,y CPS Mthe K9ISTRIBUTION AAREEMENTK)m

WHEREAS1 CTI ente*ed !nto a 9!st*!,+t!on A2*ee$ent #!th CPS e""e%t!e Ma*%h 11 0))0 '+*s+ant
to #h!%h CTI has the *!2ht to d!st*!,+te %e*ta!n o" the '*od+%ts $an+"a%t+*ed ,y CPS Mthe KCTI
9ISTRIBUTION AAREEMENTK and to2ethe* #!th the 9!st*!,+t!on A2*ee$ent1 the
K9ISTRIBUTION AAREEMENTSK)m
WHEREAS1 CPS !s en2a2ed !n the dee-o'$ent1 $an+"a%t+*e1 asse$,-y1 se--!n2 and
-!%ens!n2 o" ha*d#a*e1 so"t#a*e1 syste$s and e>+!'$ent1 and 'a*ts and %o$'onents the*eo"1 +sed
!n the 'os!t!on e$!ss!on to$o2*a'hy MKPETK) ,+s!ness "o* h+$an !$a2!n2m
WHEREAS1 CTI 'ossesses the ne%essa*y e6'e*t!se and $a*.et!n2 o*2an!Eat!on to
'*o$ote sa-es o"1 and to so-!%!t and o,ta!n '+*%hase o*de*s "o*1 s+%h '*od+%ts and to '*o!de othe*
*e-ated se*!%es to S!e$ens !n %onne%t!on the*e#!thm
WHEREAS1 S!e$ens !s #!--!n2 to a''o!nt CTI1 and CTI !s #!--!n2 to a%%e't !ts
a''o!nt$ent1 as the non7e6%-+s!e sa-es *e'*esentat!e o" S!e$ens "o* the sa-e o" those '*od+%ts
$an+"a%t+*ed ,y CPS !n the Un!ted States +'on the te*$s and %ond!t!ons set o+t !n th!s A2*ee$entm
and
WHEREAS1 the se*!%e and $a!ntenan%e %ont*a%ts #!th %+sto$e*s "o* CPS P*od+%ts so-d
+nde* th!s A2*ee$ent sha-- ,e ass!2ned ,et#een CTI and S!e$ens !n a%%o*dan%e #!th the '*!n%!'-es
set o+t !n th!s A2*ee$entm
{t [ %R% hU' S]n2 d\%h r Q ,Xo t*[ %ho .hR%h hQn2 S! d! %R% sXn 'hg$ %wa CPS STU% ,Rn theo
hU' S]n2 nQy 'hX! STU% 2!ao %ho CTI Q S!e$ens tha% h!`n t+n theo nhqn2 n2+yNn tO% nN+ t*on2
hU' S]n2 nQym
Nay %n %x Qo nhqn2 thYa Td% S %_ .$ theo Sy1 %R% ,Nn S]n2 e .e .ct hU' S]n2 nQy theo
nhqn2 S!v+ .!`n Q S!v+ .hoXn sa+ SyB
2R-ICLE 1
2++3IN-MEN-
1.1 A''o!nt$ent. 9+*!n2 the te*$ o" th!s A2*ee$ent and +'on the te*$s and %ond!t!ons set
"o*th he*e!n1 S!e$ens a''o!nts CTI as !ts non7e6%-+s!e sa-es *e'*esentat!e to so-!%!t '+*%hase o*de*s
MKPURCHASE OR9ERSK) to ,e ente*ed !nto ,y S!e$ens #!th %+sto$e*s "o* the sa-e o" CPS
P*od+%ts Mas de"!ned !n Se%t!on 1.4) th*o+2ho+t the Un!ted States Mthe KTERRITOR:K)1 and CTI
a%%e'ts s+%h a''o!nt$ent and a2*ees to %ond+%t s+%h a%t!!t!es !n a%%o*dan%e #!th the te*$s and
'*o!s!ons o" th!s A2*ee$ent.
Hae yo+ ee* #*!tten d!a*!es !n En2-!sh&
Ho# $any %ont*a%ts hae yo+ %o--e%ted&
Ho# $any te*$s hae yo+ 2ot !n yo+* -!st o" 2-ossa*!es&
9o yo+ hae any e!den%e "o* the$&
1.0 A+tho*!ty. He*e+nde*B th!s these +nde*m +nde* th!s %ont*a%t 2!en that JJ.
Ma) CTIHs a+tho*!ty he*e+nde* sha-- ,e to so-!%!t P+*%hase O*de*s #!th!n the Te**!to*y1 '*o!ded that
a-- s+%h P+*%hase O*de*s sha-- ,e s+,Ce%t to a%%e'tan%e ,y S!e$ens as '*o!ded !n Se%t!on 4.4 he*eo".
M,) E6%e't as set "o*th !n Se%t!on 4.1 and Se%t!on =.1 he*eo"1 CTI and !ts e$'-oyees1 a2ents o*
%ont*a%to*s sha-- hae no a+tho*!ty1 and ea%h sha-- not *e'*esent that !t has the a+tho*!ty to $a.e1
e6e%+te o* ente* !nto any a2*ee$ent o* to !n%+* any !nde,tedness on ,eha-" o" S!e$ens.
M%) E6%e't as set "o*th he*e!n1 CTI and !ts e$'-oyees1 a2ents o* %ont*a%to*s sha-- $a.e
no 'ay$ent1 *e,ate1 o""e* o" *e,ate1 o* othe* *e$+ne*at!on1 d!*e%t-y o* !nd!*e%t-y1 to any
%+sto$e* o* th!*d 'a*ty1 !n%-+d!n21 #!tho+t -!$!tat!on1 any ,+ye*s1 ,*o.e*s1 o* e$'-oyees o* a2ents
the*eo" "*o$ any %o$'ensat!on o* othe* %ons!de*at!on 'a!d to o* '*o!ded to CTI ,y o* on ,eha-" o"
S!e$ens.
1.4 CPS P*od+%ts. S+,Ce%t to the te*$s o" th!s A2*ee$ent1 CTI sha-- hae the *!2ht to se--
th*o+2ho+t the Te**!to*y the '*od+%ts $an+"a%t+*ed ,y o* o""e*ed "o* sa-e ,y CPS "*o$ t!$e to t!$e
Mthe KCPS PRO9UCTSK)1 !n%-+d!n2 ,+t not -!$!ted to any so"t#a*e e$,edded the*e!n o* othe*#!se
des%*!,ed the*e#!th1 and s'a*e and *e'-a%e$ent 'a*ts and a%%esso*!es "o* those CPS P*od+%ts.
The 'a*t!es a2*ee that at a-- t!$es CTI sha-- hae the *!2ht to se--1 on ,eha-" o" S!e$ens1 a-- '*od+%ts
that S!e$ens !s 'e*$!tted to d!st*!,+te on ,eha-" o" CPS '+*s+ant to the te*$s o" the 9!st*!,+t!on
A2*ee$ent. S+,Ce%t to Se%t!on (.1 o" th!s A2*ee$ent1 a-- CPS P*od+%ts sha-- ,e $a*.eted +nde* the
S!e$ens ,*and.
1.8 Sa-es ;o*%e. As soon as *easona,-y '*a%t!%a,-e a"te* the E""e%t!e 9ate1 S!e$ens
and CTI Co!nt-y sha-- a''o!nt a Sa-es Mana2e$ent Co$$!ttee Mthe KSAGES MANAAEMENT
COMMITTEEK) #h!%h sha-- ,e %o$'osed o" s!6 $e$,e*s1 #!th th*ee *e'*esentat!es ea%h "*o$
S!e$ens and CTI. The '*esen%e o" t#o S!e$ens *e'*esentat!es and t#o CTI *e'*esentat!es sha--
%onst!t+te a >+o*+$ "o* $eet!n2s o" the Sa-es Mana2e$ent Co$$!ttee. Th*o+2h the Sa-es
Mana2e$ent Co$$!ttee1 the 'a*t!es sha-- dete*$!ne the a''*o'*!ate %o$'os!t!on1 *e'o*t!n2
st*+%t+*e and the ass!2n$ent o" *e2!ons !nto #h!%h the!* *es'e%t!e sa-es "o*%es sha-- ,e %o$,!ned.
2R-ICLE %
<ENER2L 34LI<2-I3N1 3( C-I, 1IEMEN1 2ND C+1
0.1 CTI Sa-es A%t!!t!es. At a-- t!$es d+*!n2 the te*$ o" th!s A2*ee$ent CTI1 as S!e$ensHs
non7e6%-+s!e sa-es *e'*esentat!e1 sha--B
Ma) d!-!2ent-y '*o$ote sa-es o" the CPS P*od+%ts !n the Te**!to*ym
M,) $a!nta!n !n the Te**!to*y an ade>+ate-y t*a!ned sa-es "o*%e .no#-ed2ea,-e o" the CPS
P*od+%ts as !s *easona,-y ne%essa*y to 'e*"o*$ !ts o,-!2at!ons he*e+nde*1 and $ana2e !ts sa-es
"o*%e 'e*sonne- as K'*od+%t sa-es en2!nee*sK Mas that te*$ !s +nde*stood ,y S!e$ens on the
E""e%t!e 9ate) !n s+''o*t o" S!e$ensHs a%%o+nt e6e%+t!esm
M%) 'a*t!%!'ate1 as !s a''*o'*!ate and !n %o$'-!an%e #!th a''-!%a,-e -e2a- *e>+!*e$ents1
!n a''*o'*!ate sa-es1 '*o$ot!on1 $a*.et!n2 o* $e*%hand!s!n2 '*o2*a$s !n the Te**!to*y '*e'a*ed o*
+nde*ta.en ,y o* on ,eha-" o" S!e$ensm
Md) 'a*t!%!'ate !n1 and %ons+-t #!th S!e$ens and !ts des!2nated a2ents1 *e2a*d!n2 t*ade
sho#s and e6h!,!t!ons !n the Te**!to*y #he*e s+%h 'a*t!%!'at!on #!-- '*o$ote the CPS P*od+%tsm
Me) as a''-!%a,-e1 *e"e* '*os'e%t!e %+sto$e*s to the des!2nated S!e$ens *e'*esentat!e to
o,ta!n "!nan%!n2 "o* the '+*%hase o" CPS P*od+%ts1 s+,Ce%t to the '*o!s!ons o" Se%t!on 0.< ,e-o#.
0.0 9o%+$entat!on and Re'o*ts. CTI sha-- '*e'a*e o* %a+se to ,e '*e'a*ed1 .ee'1
$a!nta!n and '*o!de S!e$ens #!th the "o--o#!n2 do%+$entat!on and *e'o*ts !n a "o*$ and "o*$at
*easona,-y a%%e'ta,-e to S!e$ensB
Ma) 'e*!od!% Mtho+2h no -ess o"ten than >+a*te*-y) *e'o*ts o" sa-es a%t!!t!es o" CTI #!th!n the
Te**!to*y !dent!"y!n21 a$on2 othe* th!n2s1 a%t+a- '+*%hase*s o" the CPS P*od+%ts and a%t!e
'*os'e%t!e '+*%hase*s1 a%t+a- o* 'end!n2 o*de*s1 %onta%t and othe* *e-eant -ead !n"o*$at!on "o*
ea%h %+sto$e* and a%t!e '*os'e%t1 and any othe* !n"o*$at!on o* data as $+t+a--y a2*eed +'on "*o$
t!$e to t!$e ,y S!e$ens and CTIm
M,) non7%on"!dent!a- ,+s!ness *e%o*ds %+sto$a*!-y $a!nta!ned ,y CTI #!th *es'e%t to CTIHs
so-!%!tat!on o" P+*%hase O*de*sm
M%) !n"o*$at!on1 !n s+%h *easona,-e deta!- as *e>+ested ,y S!e$ens1 *e2a*d!n2 $a*.et
%ond!t!ons and '*od+%t 'e*"o*$an%em
Md) a "o*e%ast "o* the n+$,e* and ty'e o" +n!ts that #!-- ,e so-d the "o--o#!n2 "!s%a- yea*1 ,y
no -ate* than May 1( o" ea%h yea*m and
Me) s+%h othe* $atte*s as *easona,-y *e>+ested ,y S!e$ens.
0.4 G!%ense to P*od+%t Te%hno-o2y. S+,Ce%t to the te*$s and %ond!t!ons o" th!s A2*ee$ent1 CPS
2*ants to CTI a non7e6%-+s!e -!%ense !n the Te**!to*y to +se the P*od+%t Te%hno-o2y Mas de"!ned
,e-o#) to the e6tent *easona,-y ne%essa*y "o* CTI to '*o$ote and so-!%!t P+*%hase O*de*s "o* the
P*od+%ts and to se*!%e and s+''o*t the P*od+%ts !n o*de* to a--o# CTI to "+-"!-- !ts o,-!2at!ons +nde*
th!s A2*ee$ent.
Th!s -!%ense !s *oya-ty7"*ee and non7t*ans"e*a,-e e6%e't as 'e*$!tted ,y Se%t!on 18.4. KPRO9UCT
TECHNOGOA:K sha-- $ean a-- %o$'+te* so"t#a*e %ode M!n o,Ce%t %ode "o*$at and !n%-+d!n2 a--
asso%!ated too- sets) and othe* te%hno-o2y and .no#7ho# %o$'*!sed #!th!n the P*od+%ts as #e--
as any se*!%e $an+a-s and +se* do%+$entat!on that !s 2ene*a--y '*o!ded ,y CPS to !ts
%+sto$e*s and s!$!-a*-y s!t+ated d!st*!,+to*s. A-- *!2hts !n and to the P*od+%t Te%hno-o2y not
e6'*ess-y 2*anted !n th!s -!%ense sha-- ,e *eta!ned ,y CPS.
0.8 O,-!2at!ons o" S!e$ens. At a-- t!$es d+*!n2 the te*$ o" th!s A2*ee$ent1 S!e$ens sha--
s+''o*t $a*.et!n2 o" the CPS P*od+%ts ,yB
Ma) P*o!d!n2 '*od+%t $ana2e*s to s+''o*t the %o$,!ned CTI7S!e$ens sa-es "o*%e M%*eated
'+*s+ant to Se%t!on 1.8 o" th!s A2*ee$ent) #!th *e2a*d to te%hn!%a- $atte*s #!th!n the!* e6'e*t!sem
M,) P*o!d!n2 '*od+%t de$onst*ato*s to de$onst*ate CPS P*od+%ts1 !n%-+d!n2 ,oth so"t#a*e
and ha*d#a*e as'e%ts o" the$m
M%) 9ee-o'!n2 sa-es too-s and sa-es a!ds1 !n%-+d!n21 a$on2 othe* th!n2s1 %ase st+d!es1 %ost
ana-yses1 and %o$'et!t!e ana-ysesm
Md) P*o$ot!n2 the +n!>+e %a'a,!-!t!es o" CPS P*od+%ts +s!n2 GSO HI7RE te%hno-o2!es
and othe* 'e*t!nent te%hno-o2!es that $ay ,e dee-o'ed Mand1 !" ne%essa*y1 a''*oed ,y the ;9A)
"o* +se !n CPS P*od+%ts d+*!n2 the te*$ o" th!s A2*ee$entm
Me) P*o$ot!n2 the +se o" CPS P*od+%ts !n *e-eant $ed!%a- d!s%!'-!nes !n%-+d!n21 ,+t
not ne%essa*!-y -!$!ted to1 on%o-o2y1 %a*d!o-o2y1 and ne+*o-o2y Mthe K/E: 9ISCIPGINESK)1 and
"+*the* dee-o'$ent o" ea%h /ey 9!s%!'-!ne as a $a*.et "o* CPS P*od+%ts and othe* CTI and
S!e$ens '*od+%ts and se*!%esm
M") P-a%!n2 ade*t!se$ents !n a''-!%a,-e Co+*na-s and '+,-!%at!ons1 e$'has!E!n2 those
Co+*na-s and '+,-!%at!ons 'e*ta!n!n2 to the /ey 9!s%!'-!nesm
M2) Attend!n2 and 'a*t!%!'at!n2 !n a''*o'*!ate t*ade sho#s 'e*ta!n!n2 to the PET
!nd+st*y o* any o" the /ey 9!s%!'-!nesm
Mh) Ens+*!n2 e>+a- *e'*esentat!on o" CTI and S!e$ens 'e*sonne- and sha*ed '*esentat!on
s'a%e at a-- t*ade sho#s attended1 +n-ess othe*#!se a2*eed ,y the 'a*t!esm
M!) To2ethe* #!th CPS1 dee-o'!n2 $ed!%a- ad!so*y ,oa*ds "o* ea%h o" the th*ee /ey
9!s%!'-!nesm
MC) To2ethe* #!th CPS1 dee-o'!n2 -+$!na*y and *e"e*en%e7s!te a%%o+nts "o* PET and
PETCTm
M.) Pa*t!%!'at!n2 !n *esea*%h '*oCe%ts #!th -+$!na*!es1 !n%-+d!n2 %o$$!t$ents to $a.e
*esea*%h %ont*!,+t!ons to -+$!na*!es "*o$ t!$e to t!$e !n %onne%t!on #!th s+%h *esea*%h '*oCe%ts1
s+,Ce%t to a''-!%a,-e -e2a- *e>+!*e$ents and S!e$ens !nte*na- 'o-!%!es 2oe*n!n2 the "+nd!n2 o"
*esea*%h 2*antsm and
M-) S+''o*t!n2 and '*o$ot!n2 to S!e$ens %+sto$e*s and S!e$ens %o*'o*ate a%%o+nts1 !n
a%%o*dan%e #!th A*t!%-e @ o" th!s A2*ee$ent1 the '*od+%ts and se*!%es $an+"a%t+*ed1 d!st*!,+ted1
ando* '*o!ded ,y CTI and !ts s+,s!d!a*!es M!n%-+d!n2 P.E.T.Net Pha*$a%e+t!%a-s1 In%.1 a
Tennessee %o*'o*at!on MKPETNETK))1 !n%-+d!n2 *ad!o'ha*$a%e+t!%a-s Mas de"!ned !n Se%t!on @.1
,e-o#)1 %y%-ot*ons1 so+*%es1 and REDEAGMTM) Ma*.et!n2 and Net#o*. So-+t!ons #o*-d#!de.
0.( O,-!2at!ons o" CPS. 9+*!n2 the te*$ o" th!s A2*ee$ent1 CPS sha-- +se %o$$e*%!a--y
*easona,-e e""o*ts to s+''o*t S!e$ens $a*.et!n2 o" the CPS P*od+%ts ,yB
Ma) P*o!d!n2 '*od+%t $ana2e*s to s+''o*t S!e$ensH '*od+%t $ana2e*s o*1 !n -!e+ o"
'*o!d!n2 '*od+%t $ana2e*s1 '*o!d!n2 ade>+ate a%%ess "o* S!e$ens '*od+%t $ana2e*s to CPSH
en2!nee*!n2 and *esea*%h 'e*sonne-m
M,) P*o!d!n2 '*od+%t de$onst*ato*s to de$onst*ate CPS P*od+%ts1 !n%-+d!n2 ,oth
so"t#a*e and ha*d#a*e as'e%ts o" the$1 to S!e$ens '*od+%t $ana2e*s and t*a!n!n2 'e*sonne-m
M%) P*o!d!n2 s+""!%!ent te%hn!%a- !n"o*$at!on1 o'e*at!ona- deta!-s and te%hn!%a- ana-yses "o*
S!e$ens to dee-o' %o$'et!t!e a*2+$ents1 sa-es too-s and '*o$ot!ona- $ate*!a-s "o* sa-es o" CPS
P*od+%tsm
Md) Cont!n+!n2 to dee-o' %o$'et!t!e '*od+%ts o* "eat+*es to "+*the* adan%e the
te%hno-o2y o* add*ess %o$'et!t!e '*ess+*es %*eated ,y the te%hno-o2y o* "eat+*es dee-o'ed ,y
%o$'et!to*sm
Me) Ma!nta!n!n2 ade>+ate '*od+%t '-ann!n2 '*o%esses1 so-!%!t!n2 %o$$ents o* "eed,a%.
on dee-o'$ent needs "*o$ S!e$ens and1 !" dete*$!ned a''*o'*!ate ,y CPS a"te* %ons+-tat!on
#!th S!e$ens1 *es'ond!n2 to o* !$'-e$ent!n2 s+%h %o$$ents o* "eed,a%.m
M") Ma!nta!n!n2 2ood >+a-!ty standa*ds and o*de* %o$'-eteness1 !n%-+d!n2 *e!e# o"
>+a-!ty *e%o*ds #!th S!e$ens 'e*!od!%a--ym
M2) P*o!d!n2 ade>+ate t*a!n!n21 too-s and $ethods to "a%!-!tate de'-oy$ent and !nsta--at!on
o" and a''-!%at!ons t*a!n!n2 "o* the CPS P*od+%ts ,y S!e$ens 'e*sonne-m
Mh) P*o!d!n2 s+''o*t "o* *esea*%h '*oCe%ts #!th -+$!na*y and *e"e*en%e s!te a%%o+nts
des!2nated ,y CPS1 !n%-+d!n2 "!nan%!a- s+''o*t !n an a$o+nt and to the e6tent dee$ed ne%essa*y
o* a''*o'*!ate to "+*the* the !nte*ests o" CPSm and
M!) Ea-+at!n2 *e>+ests "*o$ S!e$ens "*o$ t!$e to t!$e to '*o!de s+''o*t to "a%!-!tate
dee-o'$ent o" e.so"tMTM) a''-!%at!ons and !nte2*at!on and %onne%t!!ty o" s%anne* data #!th othe*
e.so"tMTM) and e.so"tGEONAR9OMTM) #o*.stat!ons o* othe* S!e$ens '*od+%ts o* a''-!%at!onsm
'*o!ded1 that any s+%h s+''o*t #!-- ,e '*o!ded ,y CPS to S!e$ens on-y +'on the!* $+t+a-
a2*ee$ent Mand !n ea%h 'a*tyHs *es'e%t!e e6e*%!se o" !ts so-e d!s%*et!on) and s+,Ce%t to
aa!-a,!-!ty o" *eso+*%es and othe* $atte*s *e-at!n2 to the "eas!,!-!ty o" '*o!d!n2 s+%h s+''o*t.
0.< P*od+%t ;!nan%!n2. S!e$ens sha-- hae the *!2ht o" "!*st *e"+sa- to '*o!de "!nan%!n2
a**an2e$ents to '+*%hase*s o" the CPS P*od+%ts "*o$ CTI '+*s+ant to th!s A2*ee$entm
'*o!ded1 that the "!nan%!n2 te*$s and '*od+%to""e*!n2 sha-- ,e no -ess "ao*a,-e to the CTI sa-es
tea$ than S!e$ens '*o!des to !ts o#n sa-es tea$. I" S!e$ens !s +n#!--!n2 o* +na,-e to '*o!de
"!nan%!n2 on a t!$e-y ,as!s "o* a '*os'e%t!e '+*%hase*1 CTI #!-- ,e 'e*$!tted to *e"e* s+%h %+sto$e*
to a-te*nat!e "!nan%!n2 so+*%es.
0.= In!t!a- T*ans"e* P*!%e Red+%t!ons. ;o* a-- o*de*s "o* CPS P*od+%ts *e%e!ed ,y CPS a"te*
the E""e%t!e 9ate1 the 'a*t!es a2*ee that M!) the %o$'onent '*!%es "o* #h!%h CTI s+''-!es GSO
and S!e$ens s+''-!es CTs to CPS sha-- ,e *ed+%ed ,y the a$o+nts set "o*th on S%hed+-e 0.=
atta%hed he*eto1 and M!!) s+%h %o$'onent '*!%e *ed+%t!ons sha-- ,e 'assed to S!e$ens !n the!*
ent!*ety ,y *ed+%!n2 the T*ans"e* P*!%es Mas that te*$ !s de"!ned !n the 9!st*!,+t!on A2*ee$ent)
,y the s+$ o" s+%h a$o+nts1 as a-so set "o*th on S%hed+-e 0.=. The 'a*t!es a2*ee that E6h!,!t 9
to the 9!st*!,+t!on A2*ee$ent sha-- ,e s+,st!t+ted #!th a *e!sed E6h!,!t 9 !n s+,stant!a--y the
"o*$ o" S%hed+-e 0.=.1 *e"-e%t!n2 the !n!t!a- t*ans"e* '*!%e *ed+%t!ons.
0.8 Add!t!ona- T*ans"e* P*!%e Red+%t!ons. ;o--o#!n2 the !n!t!a- t*ans"e* '*!%e *ed+%t!ons
%onte$'-ated !n Se%t!on 0.= a,oe1 CPS a2*ees to "+*the* *ed+%e the t*ans"e* '*!%es "o* the
S!e$ensCPS PETCT '*od+%ts !n !ts '*od+%t -!ne !n the a$o+nt o" k 'e* syste$ as *e"-e%ted on
S%hed+-e 0.8 atta%hed he*eto Mthe KA99ITIONAG TRANS;ER PRICE RE9UCTIONSK)1 s+,Ce%t
to the *e%e!'t ,y CPS o" an add!t!ona- t*ans"e* '*!%e *ed+%t!on o" k 'e* +n!t "*o$ the S!e$ens CT
d!!s!on M!.e. k "*o$ CPS and k "*o$ S!e$ens CT). The Add!t!ona- T*ans"e* P*!%e Red+%t!ons
#!-- ,e%o$e e""e%t!e #!th the o*de* o" the +n!t "*o$ S!e$ens to CPS a"te* O%to,e* 11 0))4
#h!%h sha-- !n%-+de CPS P*od+%ts o*de*ed "*o$ CPS to "!-- P+*%hase O*de*s 2ene*ated ,y CTI
a"te* May 11 0))8 '+*s+ant to th!s A2*ee$ent.
O$!tted !n"o*$at!on !s the s+,Ce%t o" a *e>+est "o* %on"!dent!a- t*eat$ent '+*s+ant to R+-e 08,70
+nde* the Se%+*!t!es E6%han2e A%t o" 1@48 and has ,een "!-ed se'a*ate-y #!th the Se%+*!t!es and
E6%han2e Co$$!ss!on.
0.@ S%o'e. The !n!t!a- t*ans"e* '*!%e *ed+%t!ons and the Add!t!ona- T*ans"e* P*!%e Red+%t!ons
%onte$'-ated !n Se%t!ons 0.= and 0.8 a,oe sha-- a''-y to S!e$ens 2-o,a- sa-es o" CPS P*od+%ts.
0.1) Pe*!od!% T*ans"e* P*!%e Re!e#. U'on S!e$ensHs #*!tten *e>+est 2!en not $o*e
"*e>+ent-y than 1 CPS and S!e$ens sha-- *e!e# CPSHs T*ans"e* P*!%es Mas that te*$ !s de"!ned !n
the 9!st*!,+t!on A2*ee$ent). ;o--o#!n2 s+%h *e!e#1 S!e$ens sha-- hae the *!2ht to '*o!de !ts
*e%o$$endat!ons as to a''*o'*!ate adC+st$ents to s+%h T*ans"e* P*!%es. A-- dete*$!nat!ons
*e2a*d!n2 the sett!n2 o* the %han2!n2 o" T*ans"e* P*!%es sha-- ,e $ade ,y CPS as '*o!ded !n the
Jo!nt Dent+*e A2*ee$ent1 and no '*o!s!on o" th!s Se%t!on 0.1) sha-- *est*!%t CPSHs d!s%*et!on !n
$a.!n2 s+%h dete*$!nat!ons.
2R-ICLE *
3RDER1 (3R C+1 +R3D0C-1
4.1 P+*%hase O*de*s. CTI sha-- so-!%!t P+*%hase O*de*s so-e-y on the ,as!s o" the te*$s and
%ond!t!ons o" sa-e Mthe KTERMS O; SAGEK) ,y +t!-!E!n2 the esta,-!shed standa*d sa-es '*o%esses o"
S!e$ens. In o*de* to dete*$!ne the '*!%e to %+sto$e*s1 CTIHs sa-es a2ents sha-- +se the -!st '*!%es as
'+,-!shed !n the S!e,e- >+ote syste$ +t!-!E!n2 the sa$e '*!E!n2 a+tho*!t!es and es%a-at!on
'*o%esses as the S!e$ens 'e*sonne-. S!e$ens sha-- !$'-e$ent !ts '*!%!n2 'o-!%!es "a!*-y ,et#een the
S!e$ens and CTI sa-es o*2an!Eat!on so that ne!the* 'a*ty !s d!sadanta2ed !n '+*s+!n2 o''o*t+n!t!es
!n the $a*.et'-a%e. Whe*e a''*o'*!ate1 CTI sha-- !n"o*$ ea%h '*os'e%t!e %+sto$e* that
%ons+$$at!on o" the sa-e !s s+,Ce%t to S!e$ensH a%%e'tan%e o" the P+*%hase O*de*.
4.0 S+,$!ss!on o" P+*%hase O*de*s to S!e$ens. W!th!n one M1) ,+s!ness days a"te* CTI has
o,ta!ned a s!2ned P+*%hase O*de* "*o$ a '*os'e%t!e %+sto$e*1 CTI sha-- s+,$!t the P+*%hase
O*de* to S!e$ens "o* *e!e# and a''*oa-. CTI sha-- !n%-+de any add!t!ona- !n"o*$at!on *e2a*d!n2
the '*os'e%t!e %+sto$e* o* the o*de* that S!e$ens *easona,-y $ay *e>+est.
4.4 A%%e'tan%e o" P+*%hase O*de*s. A-- P+*%hase O*de*s s+,$!tted ,y CTI a*e s+,Ce%t to
a%%e'tan%e !n #*!t!n2 ,y S!e$ens !n a%%o*dan%e #!th !ts %o*'o*ate 'o-!%y. S!e$ens sha-- dete*$!ne
#hethe* o* not !t #!-- a%%e't a P+*%hase O*de* #!th!n t#o M0) ,+s!ness days o" *e%e!!n2 the P+*%hase
O*de* and any add!t!ona- !n"o*$at!on "*o$ CTI. S!e$ens '*o$'t-y the*ea"te* sha-- de-!e* not!%e o"
!ts de%!s!on !n #*!t!n2 to CTI. S!e$ens sha-- ,e o,-!2ated to a%%e't a-- P+*%hase O*de*s s+,$!tted
,y CTI that hae ,een a''*oed th*o+2h the S!e$ens standa*d o*de* a%%e'tan%e '*o%ess1 #h!%h
a''-!es "o* a-- ,+s!ness %ond+%ted ,y S!e$ens !n the Te**!to*y. I" the P+*%hase O*de* *e>+!*es
"!nan%!n21 then the P+*%hase O*de* #!-- ,e %ond!t!ona--y a%%e'ted ,ased on "!nan%!n2 a''*oa-.
O$!tted !n"o*$at!on !s the s+,Ce%t o" a *e>+est "o* %on"! ent!a- t*eat$ent '+*s+ant to R+-e 08,70
+nde* the Se%+*!t!es E6%han2e A%t o" 1@48 and has ,een "!-ed se'a*ate-y #!th the Se%+*!t!es and
E6%han2e Co$$!ss!on.
4.8 Sa-es Reen+e. Sa-es *een+e +nde* th!s A2*ee$ent sha-- a%%*+e to S!e$ens !n "+--1 !n
a%%o*dan%e #!th 2ene*a--y a%%e'ted a%%o+nt!n2 '*!n%!'-es.
4.( Insta--at!on and T*a!n!n2. S!e$ens sha-- ,e *es'ons!,-e "o* !nsta--at!on and !n!t!a-
a''-!%at!ons t*a!n!n2 th*o+2h "o*$a- %+sto$e* a%%e'tan%e o" the so-d CPS P*od+%ts. CTI a2*ees
to '*o!de !nsta--at!on s+''o*t and !n!t!a- a''-!%at!ons t*a!n!n2 d+*!n2 the "!*st s!6 M<) $onths o" the
te*$ o" th!s A2*ee$ent1 at a '*!%e to ,e $+t+a--y a2*eed ,y CTI and S!e$ens. P*!%!n2 sha-- ,e
%o$'a*a,-e to %+**ent '*!%!n2 '*esent-y o""e*ed ,y CTI ando* S!e$ens. Whe*ee* 'oss!,-e d+*!n2
the "!*st s!6 M<) $onths o" the te*$ o" th!s A2*ee$ent1 the 'a*ty a#a*ded the Se*!%e Cont*a%t "o* a
CPS P*od+%t +nde* the '*o!s!ons o" A*t!%-e = #!-- 'e*"o*$ !nsta--at!on and t*a!n!n2m and1 !" s+%h
'a*ty !s CTI1 then S!e$ens #!-- 'ay to CTI k 'e* CPS P*od+%t1 e>+a- to the "!*st7yea* #a**anty
-a,o* %*ed!t e6tended to S!e$ens +nde* the '*o!s!ons o" the 9!st*!,+t!on A2*ee$ent.
4.< Ba%.-o2. The %o$'-et!on o" "!*$ P+*%hase O*de*s #h!%h hae ,een e6e%+ted ,y the
%+sto$e* '*!o* to the E""e%t!e 9ate ,+t "o* #h!%h de-!e*y has not yet ta.en '-a%e Mthe
KBAC/GOA OR9ERSK) sha-- ,e %a**!ed o+t ,y S!e$ens o* hCTI1 #h!%hee* o*!2!na--y ente*ed
!nto the P+*%hase O*de*.
4.= Sa-es ;+nne-. On o* ,e"o*e J+ne 11 0))81 *e'*esentat!es o" CTI and S!e$ens sha-- *e!e#
a-- +ne6'!*ed >+otes that a*e !n the %o+*se o" ,e!n2 ne2ot!ated ,y CTI that #e*e o+tstand!n2 as o"
the E""e%t!e 9ate Mthe K;UNNEG OR9ERSK). CTI sha-- ente* !nto a-- ;+nne- O*de*s1 "*o$ t!$e
to t!$e a"te* the E""e%t!e 9ate1 !n the o*d!na*y %o+*se o" ,+s!ness. Based on !ts *e!e# o" the
;+nne- O*de*s #!th CTI1 S!e$ens sha-- se-e%t s+%h o" the ;+nne- O*de*s as $eet S!e$ensH standa*ds
"o* a%%e'tan%e1 #he*e+'on CTI and S!e$ens sha-- #o*. to2ethe* to e""e%t a t*ans!t!on o" the
*e-at!onsh!' "*o$ CTI to S!e$ens !n a $anne* that $eets the !nd!!d+a- needs o" the %+sto$e*.
CTI sha-- %a**y o+t a-- ;+nne- O*de*s Ma) not se-e%ted ,y S!e$ens !n a%%o*dan%e #!th the
"o*e2o!n21 o* M,) se-e%ted ,y S!e$ens1 ,+t as to #h!%h a t*ans!t!on a''*oa%h a%%e'ta,-e to the
%+sto$e* !s not a%h!eed.
2R-ICLE 4
EB+EN1E1
8.1 E6'enses.
Ma) Not -ate* than one h+nd*ed "!"ty M1()) days '*!o* to the end o" ea%h CTI "!s%a- yea*1 CTI
sha-- '*e'a*e and '*esent to S!e$ens a '*o'osed ann+a- o'e*at!n2 and %a'!ta- ,+d2et Mthe
KBU9AETK) "o* the e6'enses to ,e *e!$,+*sed ,y S!e$ens '+*s+ant to Se%t!on 8.1M,) he*eo"
MKREIMBURSABGE EPENSESK) d+*!n2 the "o--o#!n2 CTI "!s%a- yea*. S!e$ens sha-- hae
th!*ty M4)) days !n #h!%h to *e!e# the B+d2et and %o$$+n!%ate any $ate*!a- o,Ce%t!ons o*
*e>+ested %han2es to the B+d2et !n #*!t!n2 to CTI !n *easona,-e deta!-. CTI and S!e$ens sha-- #o*.
to2ethe* to '*o$'t-y *es'ond to any o,Ce%t!ons and *e>+ested %han2es s+,$!tted ,y S!e$ens.
S!e$ens and CTI sha-- $+t+a--y a2*ee +'on a B+d2et ,y no -ate* than J+ne 0) o" ea%h yea*m
'*o!ded1 that !" S!e$ens and CTI a*e +na,-e to a''*oe a B+d2et ,y the ,e2!nn!n2 o" CTIHs "!s%a-
yea*1 then +nt!- an a2*ee$ent !s *ea%hed the B+d2et "o* the '*!o* yea* sha-- ,e dee$ed to ,e
ado'ted as the B+d2et "o* the %+**ent yea*1 #!th ea%h -!ne !te$1 as a''-!%a,-e1 !n the B+d2et !n%*eased
,y the 'e*%enta2e !n%*ease !n the Cons+$e* P*!%e Inde6 7 A-- U*,an Cons+$e*s MCPI7U) U.S.
C!ty Ae*a2e A-- Ite$s 1@807881)) "*o$ A+2+st o" the '*!o* yea* to A+2+st o" the %+**ent yea*.
O$!tted !n"o*$at!on !s the s+,Ce%t o" a *e>+est "o* %on"!dent!a- t*eat$ent '+*s+ant to R+-e 08,70
+nde* the Se%+*!t!es E6%han2e A%t o" 1@48 and has ,een "!-ed se'a*ate-y #!th the Se%+*!t!es and
E6%han2e Co$$!ss!on
M,) S!e$ens sha-- *e!$,+*se CTI "o* a-- d!*e%t e6'enses !n%+**ed ,y CTI #!th *es'e%t to the
A%%o+nt Mana2e*s e$'-oyed ,y CTI #ho ass!st !n the sa-es1 $a*.et!n2 and a%%o+nt
$ana2e$ent "o* the CPS P*od+%ts and *e-ated ad$!n!st*at!e s+''o*t 'e*sonne- Mthe KACCOUNT
MANAAERSK)1 !n%-+d!n2 #!tho+t -!$!tat!on M!) 'ay*o--1 #a2es1 sa-a*!es and ,ene"!tsm and M!!)
t*ae-1 -od2!n2 and *e-ated e6'ensesm e6%e't e$'-oy$ent ta6es1 #h!%h #!-- ,e 'a!d as '*o!ded !n
Se%t!on <.0.
M%) On the tenth M1)th) day "o--o#!n2 the end o" ea%h $onth d+*!n2 the te*$ o" th!s
A2*ee$ent1 CTI sha-- s+,$!t to S!e$ens an !no!%e !dent!"y!n2 the a$o+nt o" Re!$,+*sa,-e
E6'enses !n%+**ed !n the '*e!o+s $onth. W!th!n th!*ty M4)) ,+s!ness days "o--o#!n2 the date o"
s+%h !no!%e1 S!e$ens sha-- 'ay to CTI !n %ash !a #!*e t*ans"e* to an a%%o+nt des!2nated ,y CTI
the a$o+nt set "o*th on s+%h !no!%e.
Md) The e6'enses to ,e !n%+**ed ,y S!e$ens '+*s+ant to th!s Se%t!on 8.1 sha-- not e6%eed k
"o* the 'e*!od "*o$ the E""e%t!e 9ate to Se'te$,e* 4)1 0))8.
Me) Conte$'o*aneo+s-y #!th the e6e%+t!on o" th!s A2*ee$ent1 CTI has '*o!ded to S!e$ens1
and S!e$ens has a''*oed1 a ,+d2et "o* the "!s%a- yea* "*o$ O%to,e* 11 0))8 to Se'te$,e* 4)1 0))(
*e"-e%t!n2 ann+a- e6'enses o" not $o*e than k.
8.0 Ea-+at!on o" CRPs.
Ma) The Pa*t!es a2*ee that the ae*a2e %+sto$e* *ea-!Eed '*!%es "o* the CPS P*od+%t
%on"!2+*at!on set "o*th on S%hed+-e 8.0 he*eo" Mthe KCRPSK) #!-- ,e *e!e#ed no -ate* than O%to,e*
411 0))8 "o* the "!e $onths end!n2 Se'te$,e* 4)1 0))8 Mthe KREDIEW PERIO9K) !n o*de* to
dete*$!ne #hethe*1 oe* the Re!e#
Pe*!od1 the CRPs on sa-es o" CPS P*od+%ts !n the Un!ted States e6%eed the "o--o#!n2 ta*2et
CRPs "o* s+,stant!a--y s!$!-a* '*od+%t %on"!2+*at!onsB
07s-!%e PETCT . . k
<7s-!%e PETCT . . k
1<7s-!%e PETCT . . k
The Pa*t!es a2*ee that the ana-ys!s o" sa-es d+*!n2 the Re!e# Pe*!od #!-- !n%-+de on-y those
t*ansa%t!ons that #e*e ente*ed !nto a"te* the t*ans"e* '*!%e *ed+%t!ons ,e%a$e e""e%t!e1 *e2a*d-ess
o" sh!'$ent date. In the eent the ae*a2e CRPs e6%eed the ta*2et CRPs set "o*th a,oe "o* CPS
P*od+%ts !nsta--ed !n the Un!ted States1 S!e$ens and CTI sha-- ea%h *e%e!e ()n o" s+%h e6%ess #!th
s+%h 'ay$ent1 !" any1 to ,e $ade #!th!n th!*ty M4)) days o" the t+*noe* and a%%e'tan%e ,y
%+sto$e*. A s!$!-a* *e!e# #!-- ,e %ond+%ted ea%h "!s%a- >+a*te* d+*!n2 the te*$ o" th!s A2*ee$ent
%o$$en%!n2 O%to,e* 11 0))8. The 'a*t!es a2*ee that the ta*2et CRPs #!-- ,e *ed+%ed do--a*7"o*7
do--a* #!th any t*ans"e* '*!%e *ed+%t!ons !$'-e$ented a"te* the !n!t!a- t*ans"e* '*!%e *ed+%t!on
*e"e**ed to !n Se%t!ons 0.= and 0.8 he*eo".
O$!tted !n"o*$at!on !s the s+,Ce%t o" a *e>+est "o* %on"!dent!a- t*eat$ent '+*s+ant to R+-e 08,70
+nde* the Se%+*!t!es E6%han2e A%t o" 1@48 and has ,een "!-ed se'a*ate-y #!th the Se%+*!t!es and
E6%han2e Co$$!ss!on
M,) T*ans"e* P*!%e Re-!e" to G+$!na*!es. S!e$ens and CPS a%.no#-ed2e that %e*ta!n
sa-es to .ey a%%o+nts and othe* .ey $a*.et o''o*t+n!t!es MK-+$!na*!esK) $ay "*o$ t!$e to
t!$e ne%ess!tate a "+*the* *ed+%t!on !n CRPs "o* %o$$e*%!a- *easons. The 'a*t!es a2*ee that CPS
sha-- ,e "*ee to *ed+%e !ts t*ans"e* '*!%es #!th!n the -!$!ted s%o'e o" $a.!n2 sa-es to s+%h
-+$!na*!es1 s+%h de%!s!on to ,e ,ased +'on *easona,-e ,+s!ness "a%to*s. A%%o*d!n2-y1 the 'a*t!es
a2*ee that CRPs a*!s!n2 "*o$ s+%h t*ansa%t!ons sha-- ,e e6%-+ded "*o$ the %a-%+-at!on %onte$'-ated
!n Se%t!on 8.0Ma) a,oe. The CRPs "o* a-- sa-es o" PET and PETCT '*od+%ts !n $+-t!7$oda-!ty
dea-s #he*e the CPS o-+$e !s -ess than n o" the tota- o*de* o-+$e a-so #!-- ,e e6%-+ded "*o$
the %a-%+-at!on %onte$'-ated !n Se%t!on 8.0Ma) a,oe. The Pa*t!es sha-- des!2nate one
*e'*esentat!e "*o$ ea%h o" the!* "!nan%e o*2an!Eat!ons to ea-+ate and a2*ee on those
t*ansa%t!ons that sho+-d ,e e6%-+ded "*o$ the "o*e2o!n2 %a-%+-at!on. In the eent the "!nan%e
tea$s "a!- to a2*ee1 the d!s'+ted t*ansa%t!ons sha-- ,e es%a-ated to the P*es!dent o" ea%h Pa*ty "o* a
de%!s!on1 '*!o* to s+,$!ss!on to a*,!t*at!on !n a%%o*dan%e #!th Se%t!on 10.1 o" th!s A2*ee$ent. In
o*de* to "a%!-!tate '*oa%t!e de%!s!on $a.!n21 on%e 'e* "!s%a- >+a*te* the %o$,!ned S!e$ens and
CTI sa-es "o*%es #!-- dee-o' a -!st o" the -+$!na*y a%%o+nts to ,e ta*2eted1 as a 107$onth *o--!n2
"o*e%ast.
8.4 Ins'e%t!on. CTI sha-- hae the *!2ht1 e6e*%!sa,-e t#!%e 'e* "!s%a- yea* +'on "!e M()
,+s!ness days not!%e to S!e$ens1 to !ns'e%t at S!e$ensH head>+a*te*s "o* a 'e*!od o" no -on2e*
than th*ee M4) ,+s!ness days the %+sto$e* a%%o+nt !n"o*$at!on1 "!nan%!a- *e%o*ds1 se*!%e %ont*a%ts1
,oo.s1 *e'o*ts1 and othe* do%+$ents '*e'a*ed1 $a!nta!ned o* *eta!ned ,y S!e$ens that s+''o*t the
%a-%+-at!on o" CRPs %onte$'-ated !n Se%t!on 8.0 he*eo" and the add!t!ona- 'ay$ents1 !" any1 to
,e $ade1 as #e-- as the a--o%at!on o" se*!%e %ont*a%ts %onte$'-ated !n Se%t!on =.1 ,e-o#. I"
S!e$ens *easona,-y dete*$!nes that the dates !n!t!a--y %hosen ,y CTI to 'e*"o*$ the !ns'e%t!on
#o+-d +n*easona,-y !nte*"e*e #!th S!e$ensHs ,+s!ness1 then S!e$ens and CTI sha-- se-e%t ne#
dates "o* the !ns'e%t!on ,y $+t+a- a2*ee$ent. CTI a2*ees that !t sha-- ho-d !n %on"!den%e and
t*eat as %on"!dent!a- a-- %on"!dent!a- !n"o*$at!on *e%e!ed "*o$ S!e$ens '+*s+ant to th!s Se%t!on
8.4 and sha-- on-y +se and d!s%-ose s+%h !n"o*$at!on on a need7to7.no# ,as!s !n %onne%t!on #!th
the ,+s!ness *e-at!ons ,et#een CTI and S!e$ens1 "o* "!nan%!a- and '-ann!n2 '+*'oses1 to
*eso-e d!s'+tes ,et#een the 'a*t!es *e2a*d!n2 the a--o%at!on o" Se*!%e Cont*a%ts o* the a$o+nt
o#ed to CTI '+*s+ant to Se%t!on 8.0 o" th!s A2*ee$ent.
2R-ICLE '
-R2DEM2R;1
(.1 S!e$ens B*and. The CPS P*od+%ts so-d ,y CTI '+*s+ant to the te*$s o" th!s A2*ee$ent
sha-- ,e $a*.eted and so-d +nde* S!e$ens t*ade$a*.s1 se*!%e $a*.s1 -o2os1 t*ade na$es1 -a,e-s
ando* othe* $ate*!a-sm '*o!ded1 ho#ee*1
O$!tted !n"o*$at!on !s the s+,Ce%t o" a *e>+est "o* %on"!dent!a- t*eat$ent '+*s+ant to R+-e 08,70
+nde* the Se%+*!t!es E6%han2e A%t o" 1@48 and has ,een "!-ed se'a*ate-y #!th the Se%+*!t!es and
E6%han2e Co$$!ss!on. that those CPS P*od+%ts so-d ,y CTI !n "+-"!--$ent o" Ba%.-o2 O*de*s
'+*s+ant to Se%t!on 4.< o" th!s A2*ee$ent o* !n "+-"!--$ent o" ;+nne- O*de*s not ente*ed !nto and
%o$'-eted ,y S!e$ens '+*s+ant to Se%t!on 4.= o" th!s A2*ee$ent sha-- ,e so-d +nde* CTI
t*ade$a*.s1 se*!%e $a*.s1 -o2os1 t*ade na$es1 -a,e-s ando* othe* $ate*!a-s. Noth!n2 he*e!n
%onta!ned sha-- 2!e o* ,e dee$ed to 2!e CTI o* !ts e$'-oyees1 a2ents o* %ont*a%to*s any *!2ht1
t!t-e o* !nte*est !n any t*ade$a*.1 se*!%e $a*.1 %o'y*!2ht o* othe* !nte--e%t+a- '*o'e*ty *!2ht he-d o*
+sed ,y S!e$ens. CTI sha-- not .no#!n2-y ta.e any a%t!on1 o* .no#!n2-y "a!- to ta.e any a%t!on
#he*e s+%h a%t!on o* "a!-+*e #o+-d1 d!*e%t-y o* !nd!*e%t-y1 hae an ade*se e""e%t +'on the
t*ade$a*.s1 se*!%e $a*.s1 %o'y*!2hts o* othe* !nte--e%t+a- '*o'e*ty *!2hts o" S!e$ens.
(.0 CTI P*od+%ts. A-- CTI P*od+%ts sha-- ,e $a*.eted and so-d +nde* CTI t*ade$a*.s1 se*!%e
$a*.s1 -o2os1 t*ade na$es1 -a,e-s ando* othe* $ate*!a-s. Noth!n2 he*e!n %onta!ned sha-- 2!e o*
,e dee$ed to 2!e S!e$ens o* !ts e$'-oyees1 a2ents o* %ont*a%to*s any *!2ht1 t!t-e o* !nte*est !n
any t*ade$a*.1 se*!%e $a*.1 %o'y*!2ht o* othe* !nte--e%t+a- '*o'e*ty *!2ht he-d o* +sed ,y CTI.
S!e$ens sha-- not .no#!n2-y ta.e any a%t!on1 o* .no#!n2-y "a!- to ta.e any a%t!on #he*e s+%h
a%t!on o* "a!-+*e #o+-d1 d!*e%t-y o* !nd!*e%t-y1 hae an ade*se e""e%t +'on the t*ade$a*.s1
se*!%e $a*.s1 %o'y*!2hts o* othe* !nte--e%t+a- '*o'e*ty *!2hts o" CTI.
(.4 CPS. The 'a*t!es he*eto a2*ee that noth!n2 %onta!ned !n th!s A2*ee$ent !s !ntended M!)
to -!$!t o* *est*!%t CPSH *!2ht to -a,e- o* +se !ts t*ade$a*.s1 se*!%e $a*.s1 -o2os and t*ade na$es
!n any $anne* ne%essa*y to $a6!$!Ee the 2*o#th o" !ts ,+s!ness1 o* M!!) to a$end o* $od!"y any
te*$ o* '*o!s!on o" the Jo!nt Dent+*e A2*ee$ent o* the *!2hts o" the 'a*t!es the*e+nde*. W!th
*es'e%t to the CPS P*od+%ts sh!''ed #!th the S!e$ens -o2o o* +nde* the S!e$ens ,*and1 CPS
a2*ees that !t #!-- not a-so '-a%e a CPS -o2o on the e>+!'$ent1 othe* than the CPS $an+"a%t+*e*
-a,e- on the -o#e* *!2ht *ea* %o*ne*1 #!tho+t the '*!o* a''*oa- o" S!e$ens. ;o* '+*'oses o" th!s
A2*ee$ent1 the 'a*t!es a2*ee that CPS sha-- not ,e %ons!de*ed an Ka""!-!ateK o" e!the* CTI o*
S!e$ens1 ,+t sha-- ,e dee$ed an !nde'endent ,+s!ness ente*'*!se s+,Ce%t to the oe*s!2ht and
%ont*o- o" !ts Boa*d o" 9!*e%to*s and the te*$s o" the Jo!nt Dent+*e A2*ee$ent.
2R-ICLE ,
-2BE1, IM+3R-, EB+3R-
<.1 Sa-es and Re-ated Ta6es. In the eent any 2oe*n$enta- ent!ty !$'oses any ta6 on the
sa-e o" CPS P*od+%ts1 S!e$ens sha-- e!the* 'ay the a$o+nt o" s+%h ta6 d!*e%t-y1 o* %a+se the
%+sto$e*s to 'ay the a$o+nt o" s+%h ta6es d!*e%t-y1 to s+%h 2oe*n$enta- ent!ty. CTI sha-- hae no
o,-!2at!on to 'ay any ta6es on the sa-e o" the CPS P*od+%ts and S!e$ens a2*ees to !nde$n!"y and
*e!$,+*se CTI "o* any s+%h ta6es !$'osed on CTI ,y any 2oe*n$enta- ent!ty1 e6%e't that
S!e$ens sha-- not ,e o,-!2ated to 'ay sa-es o* *e-ated ta6es on sa-es o" any CPS P*od+%ts "o* #h!%h
S!e$ens does not 2et sa-es %*ed!t +nde* the te*$s o" th!s A2*ee$ent.
<.0 E$'-oy$ent Ta6es. The 'a*t!es a%.no#-ed2e and a2*ee that the A%%o+nt Mana2e*s
#!-- ,e e$'-oyed ,y CTI and #!-- +nde* no %!*%+$stan%es ,e %ons!de*ed e$'-oyees o" S!e$ens.
CTI sha-- ,e *es'ons!,-e "o* a-- #!thho-d!n21 'ay*o-- and s!$!-a* ta6es *e-ated to !ts e$'-oy$ent o"
the A%%o+nt Mana2e*s none o" the A%%o+nt Mana2e*s sha-- ,e ent!t-ed to any ,ene"!ts a""o*ded to
the e$'-oyees o" S!e$ens. CTI a2*ees thatB M!) S!e$ens #!-- not #!thho-d on ,eha-" o" the A%%o+nt
Mana2e*s any s+$s "o* !n%o$e ta61 +ne$'-oy$ent !ns+*an%e1 so%!a- se%+*!ty1 o* any othe*
#!thho-d!n2 '+*s+ant to any -a# o* *e>+!*e$ent o" an2oe*n$enta- ,odym and M!!) a-- o" s+%h ta6es1
'ay$ents and #!thho-d!n2s1 !" any1 a*e the so-e *es'ons!,!-!ty o" CTI. CTI a2*ees to !nde$n!"y and
*e!$,+*se S!e$ens "o* any !n%o$e ta61 +ne$'-oy$ent #!thho-d!n2 o* othe* e$'-oy$ent ta6es #!th
*es'e%t to the A%%o+nt Mana2e*s that a*e !$'osed on S!e$ens ,y any 2oe*n$enta- ent!ty.
2R-ICLE 6
1ER>ICE 2ND :2RR2N-7
=.1 Se*!%e Cont*a%ts.
Ma) ;o* '+*'oses o" th!s A*t!%-e =1 the te*$ KSERDICE CONTRACTK $eans a se*!%e
%ont*a%t %oe*!n2 a CPS P*od+%t "o* #h!%h "o*$a- %+sto$e* a%%e'tan%e !s *e%e!ed M!) at the t!$e
o" sa-e o" the CPS P*od+%t1 *e2a*d-ess o" #hethe* the CPS P*od+%t !s so-d as a ne# +n!t o* as a +sed
+n!t1 o* M!!) at any t!$e a"te* s+%h sa-e +nt!- the date #h!%h !s e-een M11) $onths a"te* "o*$a-
%+sto$e* a%%e'tan%e o" !nsta--at!on o" the CPS P*od+%t.
M,) As soon as *easona,-y '*a%t!%a,-e a"te* the E""e%t!e 9ate1 the 'a*t!es sha-- "o*$ a
%o$$!ttee Mthe KSERDICE MANAAEMENT COMMITTEEK) #h!%h sha-- ,e %o$'osed o" s!6
*e'*esentat!es as "o--o#sB th*ee *e'*esentat!es ea%h "*o$ S!e$ens and CTI #!th t#o
*e'*esentat!es "*o$ ea%h 'a*ty "*o$ the se*!%e o*2an!Eat!on and one "*o$ the "!nan%e 2*o+'.
The '*esen%e o" t#o S!e$ens *e'*esentat!es and t#o CTI *e'*esentat!es sha-- %onst!t+te a
>+o*+$ "o*
$eet!n2s o" the Se*!%e Mana2e$ent Co$$!ttee. The Se*!%e Mana2e$ent Co$$!ttee
sha-- $eet on a $onth-y ,as!s1 and $ay $eet ,y te-e'hone %on"e*en%e. At ea%h
$eet!n21 S!e$ens sha-- s+,$!t to the Se*!%e Mana2e$ent Co$$!ttee a -!st o" a--
Se*!%e Cont*a%ts *e%e!ed ,y S!e$ens s!n%e the '*e!o+s $eet!n2. The -!st o" Se*!%e Cont*a%ts
sha-- !n%-+de a s+$$a*y o" a-- !n"o*$at!on the Se*!%e Mana2e$ent Co$$!ttee dee$s
ne%essa*y "o* the se-e%t!on o" s+%h %ont*a%ts ,y the Pa*t!es. The se-e%t!on o" s+%h %ont*a%ts ,y CTI
and S!e$ens sha-- ta.e !nto %ons!de*at!on %e*ta!n 'a*a$ete*s1 !n%-+d!n21 ,+t not -!$!ted to1
'*edo$!nant 2eo2*a'h!% %oe*a2e !n the %+sto$e*Hs *e2!on1 '*e7e6!st!n2 ,+s!ness
*e-at!onsh!'s1 and %ont*a%t a-+e. At the !n!t!a- $eet!n2 o" the Se*!%e Mana2e$ent Co$$!ttee1
S!e$ens sha-- hae the *!2ht to se-e%t the "!*st Se*!%e Cont*a%t !t des!*es to $a!nta!n1 then CTI
sha-- hae the *!2ht to se-e%t one Se*!%e Cont*a%t1 and the*ea"te* the 'a*t!es sha-- a-te*nate
se-e%t!ons +nt!- a-- Se*!%e Cont*a%ts hae ,een d!!ded ,et#een the$ as %-ose-y as 'oss!,-e to the
*een+e s'-!t %onte$'-ated !n Se%t!on =.0 ,e-o#. The se-e%t!on se>+en%e #!-- %ont!n+e to a-te*nate at
s+,se>+ent Se*!%e Mana2e$ent Co$$!ttee $eet!n2s1 s+%h that the 'a*ty that d!d not hae the -ast
se-e%t!on at the '*!o* $eet!n2 sha-- hae the *!2ht to se-e%t "!*st at the ne6t $eet!n2. W!th!n th!*ty
M4)) days o" the end o" ea%h "!s%a- >+a*te*1 the %h!e" "!nan%!a- o""!%e* o" S!e$ens o* the %h!e"
"!nan%!a- o""!%e* o" !ts N+%-ea* Med!%!ne A*o+' sha-- %e*t!"y that a-- Se*!%e Cont*a%ts *e>+!*ed to
,e s+,$!tted to the Se*!%e Mana2e$ent Co$$!ttee +nde* th!s A2*ee$ent hae ,een s+,$!tted
as *e>+!*ed he*e+nde* and that the s+$$a*!es o" s+%h se*!%e %ont*a%ts as '*o!ded ,y S!e$ens a*e
t*+e and %o**e%t !n a-- $ate*!a- *es'e%ts.
=.0 Se*!%e Cont*a%t T*ans"e*s. As a *es+-t o" the se-e%t!ons $ade ,y the *e'*esentat!es o"
the Se*!%e Mana2e$ent Co$$!ttee +nde* Se%t!on =.1 he*eo"1 S!e$ens and CTI sha-- ea%h ente*
!nto o* othe*#!se e""e%t the t*ans"e* o* ass!2n$ent o" s+%h !n!t!a- Se*!%e Cont*a%ts to ens+*e that
the a22*e2ate *een+es to ,e de*!ed *es'e%t!e-y ,y S!e$ens and CTI the*e+nde* sha-- ,e
s+,stant!a--y e>+a-. S!e$ens sha-- ens+*e that the a2*ee$ents e6e%+ted ,y the %+sto$e* a+tho*!Ee
the t*ans"e* o* ass!2n$ent o" s+%h Se*!%e Cont*a%ts to CTI as %onte$'-ated !n Se%t!on =.1 a,oe.
=.4 Se*!%e Cont*a%t 9!s'+tes. In the eent the Se*!%e Mana2e$ent Co$$!ttee !s +na,-e to
*eso-e any d!s'+te o* %ont*oe*sy1 the $atte* sha-- ,e '*o$'t-y s+,$!tted to the P*es!dent o" ea%h
o*2an!Eat!on "o* *eso-+t!on '*!o* to s+,$!ss!on o" the d!s'+te to a*,!t*at!on !n a%%o*dan%e #!th
Se%t!on 10.1 o" th!s A2*ee$ent. The 'a*t!es a2*ee to #o*. !n 2ood "a!th to *eso-e any s+%h d!s'+te
e6'ed!t!o+s-y !n a $anne* %ons!stent #!th the s'!*!t o" th!s A*t!%-e =.
=.8 ;!*st :ea* Wa**anty. ;!*st yea* #a**anty se*!%e sha-- ,e '*o!ded ,y the 'a*ty that *e%e!es
the Se*!%e Cont*a%t1 #!th s+%h 'a*ty a-so *e%e!!n2 the "!*st7yea* 'a*ts %*ed!t "*o$ CPS. I" CTI
'*o!des "!*st7yea* #a**anty -a,o*1 S!e$ens sha-- 'ay CTI the a''-!%a,-e -+$'7s+$ -a,o*
*e!$,+*se$ent a$o+nt set ,y S%hed+-e =.8 atta%hed he*eto. ;o* a-- CPS P*od+%ts1 #hethe* so-d as
ne# +n!ts o* +sed +n!ts1 not %oe*ed ,y a Se*!%e Cont*a%t at the t!$e o" "o*$a- %+sto$e*
a%%e'tan%e o" !nsta--at!on1 the *es'ons!,!-!ty "o* '*o!d!n2 "!*st7yea* #a**anty -a,o* on s+%h CPS
P*od+%ts sha-- ,e a--o%ated e>+a--y ,et#een CTI and S!e$ens ,y the Se*!%e Mana2e$ent
Co$$!ttee at the -ast $onth-y $eet!n2 ,e"o*e "o*$a- %+sto$e* a%%e'tan%e o" !nsta--at!on. Any
Se*!%e Cont*a%t -ate* e6e%+ted #!th *es'e%t to any s+%h CPS P*od+%t sha-- ,e a--o%ated !n
a%%o*dan%e #!th Se%t!on =.1 a,oe.
=.( E6!st!n2 Se*!%e Cont*a%tsm Insta--ed Base.
Ma) E6%e't as '*o!ded !n A*t!%-e 8 o" th!s A2*ee$ent1 a-- %ont*a%ts !n "o*%e on the
E""e%t!e 9ate ,et#een e!the* CTI o* S!e$ens and any th!*d 'a*ty "o* e6tended #a**anty se*!%e
on any CPS P*od+%t sha-- ,e *eta!ned a"te* the E""e%t!e 9ate ,y the 'a*ty #h!%h o*!2!na--y ente*ed
!nto the$.
M,) Not#!thstand!n2 the othe* '*o!s!ons o" th!s A*t!%-e =1 ,+t s+,Ce%t to the '*o!s!ons o"
A*t!%-e 81 S!e$ens and CTI sha-- hae the *!2ht !nde'endent-y to '+*s+e any and a-- se*!%e
%ont*a%ts "o* CPS P*od+%ts that1 !" ente*ed !nto1 #o+-d not $eet the de"!n!t!on o" KSe*!%e Cont*a%tK
set "o*th !n Se%t!on =.1Ma) a,oem and CTI no* S!e$ens sha-- ,e o,-!2ated to s+,$!t any s+%h se*!%e
%ont*a%t to the Se*!%e Mana2e$ent Co$$!ttee.
2R-ICLE 8
IN-ERN2-I3N2L EB+2N1I3N
8.1 Ass!2n$ent o" Se*!%e Cont*a%ts.
Ma) CTI sha-- ass!2n to S!e$ens a-- s%anne* se*!%e %ont*a%ts "o* the se*!%e o" any CPS
P*od+%ts to #h!%h CTI o* any o" !ts a""!-!ates !s a 'a*ty !n any !nte*nat!ona- $a*.et othe* than /o*ea
o* Ja'an. A -!st o" the a''-!%a,-e se*!%e %ont*a%ts to ,e ass!2ned !s atta%hed he*eto as S%hed+-e
8.1. In %onne%t!on #!th s+%h ass!2n$ent1 S!e$ens a2*ees to ass+$e a-- *e$a!n!n2 "!*st yea*
#a**anty -a,o* o,-!2at!ons a''-!%a,-e to s+%h CPS P*od+%ts1 as #e-- as !nsta--at!on and "!*st7yea*
#a**anty -a,o* o,-!2at!ons as to those CPS P*od+%ts %oe*ed ,y Ba%.-o2 O*de*s to ,e !nsta--ed at
any !nte*nat!ona- -o%at!on a"te* the E""e%t!e 9ate. CTI a2*ees to %*ed!t S!e$ens "o* the +n+sed
'*o*ated 'o*t!on o" the "!*st7yea* 'a*ts #a**anty "o* those CPS P*od+%ts %onte$'-ated !n the
!$$ed!ate-y '*e%ed!n2 senten%e1 +' to the a$o+nt set ,y CPS. The 'a*t!es a2*ee that !n no eent
sha-- s+%h %*ed!t e6%eed the a22*e2ate +n+sed '*o*ated 'o*t!on o" the "!*st7yea* 'a*ts #a**anty
a''-!%a,-e to s+%h ass!2ned se*!%e %ont*a%ts.
M,) In %ons!de*at!on "o* the ass!2n$ent o" se*!%e %ont*a%ts '+*s+ant to th!s Se%t!on 8.11
S!e$ens sha-- 'ay CTI k010))1)))1 !n !$$ed!ate-y aa!-a,-e "+nds1 to the a%%o+nt des!2nated ,y
CTI. CTI *ese*es the *!2ht to d!*e%t that so$e o* a-- o" these "+nds ,e 'a!d d!*e%t-y to CTIHs #ho--y
o#ned E+*o'ean s+,s!d!a*!es.
M%) CTI sha-- ,e *es'ons!,-e "o* a-- see*an%e and othe* %osts asso%!ated #!th the %essat!on
o" !ts !nte*nat!ona- sa-es and se*!%e ,+s!ness #!th *es'e%t to the sa-e and se*!%e o" the CPS
P*od+%ts. S!e$ens sha-- hae the *!2ht to !nte*!e#1 so-!%!t and h!*e those CTI e$'-oyees %+**ent-y
en2a2ed !n CTIHs !nte*nat!ona- sa-es and se*!%e o'e*at!ons "o* the CPS P*od+%ts.
8.0 G!$!tat!on. In %ons!de*at!on o" the ass!2n$ent set "o*th !n Se%t!on 8.1 a,oe1 CTI he*e,y
a2*ees that1 d+*!n2 the te*$ o" th!s A2*ee$ent1 !t sha-- not ente* o* *e7ente* the Un!ted States $a*.et
o* any !nte*nat!ona- $a*.et #!th *es'e%t to the sa-e o* se*!%e o" CPS P*od+%ts1 e!the* d!*e%t-y o*
!nd!*e%t-y1 a-one o* !n %oo'e*at!on #!th any th!*d 'a*ty othe* than CPS1 e6%e't as $ay ,e othe*#!se
a2*eed !n #*!t!n2 ,y the 'a*t!es he*eto o* as "o--o#sB
Ma) In /o*ea1 CTI sha-- %ont!n+e !ts "o%+s on sa-es ,ased on the "ees%an ,+s!ness $ode-
and the se*!%e o" s+%h e>+!'$ent.
M,) ;*o$ and a"te* the E""e%t!e 9ate1 the 'a*t!es a%.no#-ed2e and a2*ee that CTI sha--
*eta!n the e6!st!n2 9!st*!,+t!on A2*ee$ent "o* CTI PET P*od+%ts dated Jan+a*y 001 0))4 Mthe
KCMI AAREEMENTK) ,et#een CTI and /a,+sh!.! /a!sha CMI MKCMIK) !n Ja'an1 #h!%h has an
!n!t!a- te*$ o" th*ee M4) yea*sm '*o!ded1 that M!) +'on the te*$!nat!on o* e6'!*at!on o" the CMI
A2*ee$ent1 CTI sha-- not *e'-a%e CMI #!th anothe* d!st*!,+to* !n Ja'an o* e6tend the CMI
A2*ee$ent #!th *es'e%t to the sa-e o* se*!%e o" CPS P*od+%ts1 and M!!) d+*!n2 the te*$ o" the CMI
A2*ee$ent1 CTI #!-- not ente* !nto any ne# a2*ee$ents *e2a*d!n2 the d!st*!,+t!on o" CPS
P*od+%ts !n Ja'an.
8.4 Rest*!%t!e Coenant. In %ons!de*at!on o" the 'ay$ent o" the
%ons!de*at!on '*o!ded "o* !n Se%t!on 8.1M,) o" th!s A2*ee$ent1 d+*!n2 the te*$
o" th!s A2*ee$ent ne!the* CTI no* any ent!ty !n #h!%h CTI o#ns ()n o* $o*e o"
the ot!n2 se%+*!t!es1 othe* than CPS M%o--e%t!e-y1 the KCTI RESTRICTE9 PARTIESK)1 sha--
en2a2e !n the ,+s!ness o" se--!n21 se*!%!n21 $a!nta!n!n21 o* *e'a!*!n2 PET o* PETCT s%anne*s
!n the Un!ted States $a*.et o* any !nte*nat!ona- $a*.et othe* than /o*ea and Ja'an.
8.8 Te*$!nat!on o" Rest*!%t!ons. The -!$!tat!ons and *est*!%t!e %oenants set "o*th !n
Se%t!ons 8.0 and 8.4 a,oe sha-- te*$!nate and ,e%o$e o" no "+*the* "o*%e and e""e%t !$$ed!ate-y
+'on CTIHs *e%e!'t o" any not!%e o" non7*ene#a- o" th!s A2*ee$ent 2!en ,y S!e$ens '+*s+ant to
Se%t!on 1).1 ,e-o# !n o*de* to a--o# CTI to '*e'a*e to *e7ente* the $a*.ets at o* a"te* the e""e%t!e
date o" te*$!nat!on.
2R-ICLE 9
12LE 3( C-I +R3D0C-1
@.1 S!e$ens as Re'*esentat!e. CTI he*e,y a''o!nts S!e$ens1 and S!e$ens he*e,y a%%e'ts
a''o!nt$ent1 as CTIHs non7e6%-+s!e *e'*esentat!e to o""e* "o* sa-e to S!e$ensH %+sto$e*s '*od+%ts
$an+"a%t+*ed ando* d!st*!,+ted ,y CTI and
!ts s+,s!d!a*!es M%o--e%t!e-y1 the KCTI PRO9UCTSK)1 !n%-+d!n2 ,+t not -!$!ted toB
Ma) 'os!t*on7e$!tt!n2 $o-e%+-a* '*o,es +sed !n PET '*o%ed+*es1 #hethe* "o* d!a2nos!s
o" d!sease o* "o* *esea*%h '+*'oses MKRA9IOPHARMACEUTICAGSK)1 d!st*!,+ted ,y
PETNETm
M,) %y%-ot*onsm
M%) REDEAGMTM) Ma*.et!n2 and Net#o*. So-+t!onsm and
Md) so+*%esm '*o!ded1 #!th *es'e%t to Se%t!on @.1Md) a,oe1 that *e2+-ato*y *e>+!*e$ents "o*
CPS so+*%es a*e $et and that o""e*s a*e $ade ,y S!e$ens !n a 2ood "a!th ,as!s.
@.0 E6%-+s!!ty.
Ma) S+,Ce%t to the e6'!*at!on o* te*$!nat!on o" any e6!st!n2 a2*ee$ents to #h!%h
S!e$ens !s a 'a*ty *e2a*d!n2 the '*o!s!on to S!e$ens %+sto$e*s o" %y%-ot*ons o*
*ad!o'ha*$a%e+t!%a-s1 S!e$ens he*e,y a2*ees that d+*!n2 the te*$ o" th!s A2*ee$ent !t sha-- o""e*
e6%-+s!e-y CTI %y%-ot*ons1 PETNET *ad!o'ha*$a%e+t!%a-s1 and CPS so+*%es "o* sa-e to
S!e$ens %+sto$e*s !nte*ested !n '+*%has!n2 %y%-ot*ons1 *ad!o'ha*$a%e+t!%a-s1 o* so+*%es. It !s a
%ond!t!on to S!e$ensH o,-!2at!ons +nde* th!s Se%t!on @.0 that the %y%-ot*ons1 *ad!o'ha*$a%e+t!%a-s1
o* so+*%es ,e %o$'et!t!e-y '*!%ed1 and that M#!th *es'e%t to *ad!o'ha*$a%e+t!%a-s)1 PETNET ,e
a,-e to t!$e-y de-!e* the *ad!o'ha*$a%e+t!%a-s to the %+sto$e* s!te. S!e$ens a2*ees to *e!e#
and '+*s+e the ea*-y te*$!nat!on o" any s+%h %on"-!%t!n2 a2*ee$ent o* *e-at!onsh!' !" S!e$ens %an
do so #!tho+t %ost to !tse-" and s+%h te*$!nat!on #!-- not ade*se-y a""e%t S!e$ensHs e6!st!n2 ,+s!ness
o'e*at!ons.
M,) S!e$ens and CTI a2*ee that the '*o!s!ons o" th!s A*t!%-e @ do not !$'ose any *est*!%t!on
on M!) CTIHs *!2ht to d!st*!,+te the CTI P*od+%ts !tse-" o* th*o+2h othe*s1 M!!) S!e$ensHs *!2hts to
d!st*!,+te !ts '*od+%ts !tse-" o* th*o+2h othe*s1 o* M!!!) CPSHs *!2ht to d!st*!,+te any CPS P*od+%ts
!tse-" o* th*o+2h othe*s.
@.4 P*o%ed+*es. CTI and S!e$ens sha-- %oo'e*ate to dee-o' '*o%ed+*es "o* the sa-e o" CTI
P*od+%ts '+*s+ant to th!s A*t!%-e @m '*o!ded1 that a-- sa-es o" CTI P*od+%ts sha-- ,e $ade !n
a%%o*dan%e #!th CTIHs standa*d te*$s and %ond!t!ons o" sa-e and '+*s+ant to o*de*s a%%e'ted ,y CTI.
@.8 Pa%.a2!n2 o" CTI P*od+%ts #!th S!e$ens P*od+%ts. CTI P*od+%ts o""e*ed ,y S!e$ens
+nde* th!s A*t!%-e @ $ay ,e !n%-+ded as an o't!on to the %+sto$e* as 'a*t o" a 'a%.a2e #!th the CPS
P*od+%ts and S!e$ensH o#n '*od+%ts. In no eent sha-- S!e$ens ,e o,-!2ated to 'a%.a2e CTI
P*od+%ts #!th any othe* S!e$ens '*od+%ts1 no* sha-- any %+sto$e* ,e "o*%ed to '+*%hase any s+%h
'a%.a2e. Any s+%h 'a%.a2ed o""e*!n2 sha-- %o$'-y #!th a-- ;ede*a-1 state and -o%a- -a#s.
@.( Co$$!ss!on. The %o$$!ss!on that the S!e$ens sa-es *e'*esentat!es #!-- *e%e!e "o* the
sa-e o" the CTI P*od+%ts sha-- ,e %ons!stent #!th the %o$$!ss!on 'a!d ,y CTI to !ts PET
to$o2*a'hy sa-es *e'*esentat!es "o* the sa$e
'*od+%ts.
@.< M!*ada G!%ense. As add!t!ona- %ons!de*at!on "o* CTIHs e6e%+t!on o" th!s A2*ee$ent1
S!e$ens sha-- e6e%+te and ente* !nto that %e*ta!n ;+s!on=9MR) So"t#a*e G!%ense A2*ee$ent dated as
o" the E""e%t!e 9ate Mthe KMIRA9A GICENSEK) ,et#een S!e$ens and M!*ada So-+t!ons G!$!ted1
a #ho--y o#ned s+,s!d!a*y o" CTI !n%o*'o*ated +nde* the -a#s o" En2-and and Wa-es.
@.= ;+*the* Coo'e*at!on. The 'a*t!es #!-- #o*. to2ethe* to !dent!"y othe* 'otent!a- a*eas !n
#h!%h they $ay %o--a,o*ate !n "+*the*an%e o" the!* *es'e%t!e ,+s!nesses. S!e$ens a-so
a%.no#-ed2es !ts des!*e to ente* !nto a se'a*ate a2*ee$ent #!th Con%o*de M!%*osyste$s1 In%.
MKCONCOR9EK) "o* the d!st*!,+t!on o" !ts $!%*oPETMTM) '*od+%t -!ne1 on te*$s to ,e $+t+a--y
a2*eed +'on ,et#een S!e$ens and Con%o*de.
2R-ICLE 1@
-ERMIN2-I3N
1).1 Te*$. The !n!t!a- te*$ o" th!s A2*ee$ent sha-- ,e t#o M0) yea*s "*o$ the E""e%t!e 9ate
and sha-- a+to$at!%a--y ,e e6tended "o* add!t!ona- one M1) yea* 'e*!ods +n-ess e!the* 'a*ty
'*o!des not -ess than 18) days '*!o* #*!tten not!%e o" !ts e-e%t!on not to *ene# "o* s+%h add!t!ona-
te*$ o* th!s A2*ee$ent !s ea*-!e* te*$!nated '+*s+ant to Se%t!ons 1).01 1).41 1).81 o* 1).( he*eo".
1).0 Te*$!nat!on "o* Ca+se. At any t!$e d+*!n2 th!s A2*ee$ent1 th!s A2*ee$ent $ay ,e
te*$!nated "o* %a+seB
Ma) By any 'a*ty1 +'on th!*ty M4)) daysH #*!tten not!%e to the othe* 'a*t!es1 +'on the
o%%+**en%e o" any one o* $o*e o" the "o--o#!n2 eentsB
M!) a $ate*!a- ,*ea%h ,y any othe* 'a*ty o" th!s A2*ee$ent !" s+%h othe* 'a*ty sha-- hae
"a!-ed to %+*e s+%h ,*ea%h #!th!n n!nety M@)) daysH o" *e%e!'t o" #*!tten not!%e the*eo" "*o$ the
te*$!nat!n2 'a*ty des%*!,!n2 #!th s'e%!"!%!ty the "a%t+a- ,as!s %onst!t+t!n2 the $ate*!a- ,*ea%hm
M!!) an adC+d!%at!on o" ,an.*+'t%y o" any 'a*ty +nde* any ,an.*+'t%y o* !nso-en%y
-a#m o*
M!!!) the %o$$!ss!on ,y any 'a*ty o" a *e%e!e* "o* ,+s!ness o* '*o'e*ty1 o* the $a.!n2
o" any 2ene*a- ass!2n$ent "o* the ,ene"!t o" C*ed!to*s
M,) By CTI1 !n the eent that tota- +n!t sa-es o" CPS P*od+%ts *e'*esent -ess than n o"
tota- +n!t sa-es o" ne# PET and PETCT s%anne*s !n the Un!ted States "o* t#o %onse%+t!e "!s%a-
>+a*te*s as *e'o*ted ,y the Nat!ona- E-e%t*on!%s Man+"a%t+*e*s Asso%!at!on M!n e!the* do--a*
o-+$e o* n+$,e* o" o*de*s)1 !" s+%h *ed+%t!on !s not d!*e%t-y att*!,+ta,-e to a de%-!ne !n the
>+a-!ty o" the CPS P*od+%ts1 non7%o$'et!t!e '*!%!n2 o* t*ans"e* '*!%!n2 !ss+es not att*!,+ta,-e to
the T*ans"e* P*!%es 'a!d "o* CTs to S!e$ens ,y CPS1 ade*se a%t!on ,y the U.S. ;ood and 9*+2
Ad$!n!st*at!on Mthe K;9AK) *e-ated to CPS o* the CPS P*od+%ts1 #o*. sto''a2e o* -a,o* +n*est at
CPS that *es+-ts !n $!ssed sh!'$ents1 o* s!$!-a* eents ade*se-y a""e%t!n2 CPSHs ,+s!ness
o'e*at!ons !n a $anne* that e*odes tota- $a*.et sha*e.
M%) By CTI1 !" S!e$ens te*$!nates the M!*ada G!%ense "o* any *eason.
Md) By CTI1 !" S!e$ens !s !n ,*ea%h o* de"a+-t o" any o" !ts 'ay$ent o,-!2at!ons set
"o*th !n th!s A2*ee$ent and s+%h ,*ea%h o* de"a+-t %ont!n+es "o* th!*ty M4)) days o* $o*e a"te*
*e%e!'t o" #*!tten not!%e the*eo"1 +'on #*!tten not!%e to S!e$ens1 #!th s+%h te*$!nat!on to ,e
e""e%t!e on the date o" *e%e!'t ,y S!e$ens o" s+%h te*$!nat!on not!%e.
1).4 Te*$!nat!on U'on a ;o*%e MaCe+*e Eent. I" a ;o*%e MaCe+*e Eent Mas de"!ned !n
Se%t!on 18.0) %ont!n+es "o* a 'e*!od o" s!6 M<) $onths o* -on2e*1 then the ent!*ety o" th!s A2*ee$ent
$ay ,e te*$!nated ,y any 'a*ty #hose o#n 'e*"o*$an%e !s not de-ayed o* '*eented ,y the
;o*%e MaCe+*e Eent Mthe KUNA;;ECTE9 PART:K) !$$ed!ate-y the*ea"te* ,y '*o!d!n2
not!%e to the othe* 'a*t!es.
O$!tted !n"o*$at!on !s the s+,Ce%t o" a *e>+est "o* %on"!dent!a- t*eat$ent '+*s+ant to R+-e 08,70
+nde* the Se%+*!t!es E6%han2e A%t o" 1@48 and has ,een "!-ed se'a*ate-y #!th the Se%+*!t!es and
E6%han2e Co$$!ss!on.
1).8 Te*$!nat!on ,y M+t+a- A2*ee$ent . Th!s A2*ee$ent $ay ,e te*$!nated at any t!$e d+*!n2
the te*$ he*eo" the $+t+a- #*!tten a2*ee$ent o" the 'a*t!es he*eto.
1).( Te*$!nat!on U'on E6e*%!se o" O't!on. E!the* 'a*ty sha-- hae the *!2ht to te*$!nate th!s
A2*ee$ent at s+%h t!$e as S!e$ens atta!ns an 8)n o* 2*eate* !nte*est !n CPS '+*s+ant to the
%-os!n2 o" the add!t!ona- '+*%hase and sa-e *!2hts set "o*th !n Se%t!on 18 o" the Jo!nt Dent+*e
A2*ee$ent Mthe KOPTIONK).
1).< O,-!2at!ons U'on Te*$!nat!on.
Ma) E6%e't as '*o!ded1 CTI a2*ees that +'on the te*$!nat!on o" th!s A2*ee$ent "o* any
*eason #hatsoee* CTI sha--B
M!) %ease a-- $a*.et!n2 and '*o$ot!on o" CPS P*od+%ts and the so-!%!tat!on o" P+*%hase
O*de*s on ,eha-" o" S!e$ensm and
M!!) on o* ,e"o*e the e""e%t!e date o" te*$!nat!on1 ass!st S!e$ens !n '*eent!n2 any
d!s*+'t!on o" se*!%e o* s+''-y to %+sto$e*s o" CPS P*od+%ts -o%ated #!th!n the Te**!to*y1 ,y
'*o!d!n2 S!e$ens #!th a %o$'-ete and a%%+*ate -!st and des%*!'t!on o" a-- +n"+-"!--ed P+*%hase
O*de*s "*o$ %+sto$e*s "o* the CPS P*od+%ts s+,$!tted to CTI on o* ,e"o*e the e""e%t!e date o"
the te*$!nat!on.
M,) U'on te*$!nat!on o" th!s A2*ee$ent1 S!e$ens sha-- *e!$,+*se CTI "o* a-- e6'enses "o*
#h!%h S!e$ens !s o,-!2ated to *e!$,+*se CTI and #h!%h #e*e !n%+**ed on o* ,e"o*e the e""e%t!e
date o" te*$!nat!on.
1).= 9!st*!,+t!on o" CPS P*od+%ts.
Ma) U'on the te*$!nat!on o* non7*ene#a- o" th!s A2*ee$ent ,y S!e$ens "o* any *eason1
CTI sha-- hae the *!2ht to d!st*!,+te CPS P*od+%ts on s+,stant!a--y the te*$s set "o*th !n the CTI
9!st*!,+t!on A2*ee$ent1 as s+%h
a2*ee$ent $ay ,e a$ended "*o$ t!$e to t!$e ,y the 'a*t!es.
M,) U'on the te*$!nat!on o* non7*ene#a- o" th!s A2*ee$ent ,y CTI "o* any *eason othe*
than a 'ay$ent de"a+-t ,y S!e$ens !n a%%o*dan%e #!th to Se%t!on 1).0Md) a,oe1 CTI sha-- not
hae the *!2ht to ,e a d!st*!,+to* o" the CPS P*od+%tsm '*o!ded1 ho#ee*1 that S!e$ens and CTI $ay
ente* !nto d!s%+ss!ons *e2a*d!n2 an a''*o'*!ate OEM *e-at!onsh!' to "+*the* the %o$$e*%!a- !nte*ests
o" the 'a*t!es.
2R-ICLE 11
LIMI-1 3N D2M2<E1 2ND IN10R2NCE
11.1 G!$!tat!on o" 9a$a2es. NOTWITHSTAN9INA AN:THINA TO THE CONTRAR: IN
THIS AAREEMENT1 NEITHER PART: SHAGG BE GIABGE TO THE OTHER PART: ;OR
GOSS O; ANTICIPATE9 PRO;ITS1 OR ;OR AN: IN9IRECT1 SPECIAG1 INCI9ENTAG1
CONSEQUENTIAG OR PUNITIDE 9AMAAES ARISINA OUT O; THIS AAREEMENT OR
THE SAGE OR USE O; THE CPS PRO9UCTS.
11.0 Ins+*an%e. CTI and S!e$ens ea%h a2*ees to $a!nta!n d+*!n2 the te*$ he*eo" -!a,!-!ty
!ns+*an%e "o* 'e*sona- !nC+*y and '*o'e*ty da$a2e1 !n%-+d!n2 '*od+%t -!a,!-!ty and %ont*a%t+a-
%oe*a2e1 as set "o*th he*e!n. Coe*a2e "o* 'e*sona- !nC+*y sha-- ,e not -ess than One M!--!on
9o--a*s Mk11)))1)))) a22*e2ate ann+a- -!a,!-!ty. Coe*a2e "o* '*o'e*ty da$a2e sha-- ,e not -ess than
T#o M!--!on 9o--a*s Mk01)))1)))) 'e* o%%+**en%e. CTI and S!e$ens a2*ee that a-- -!a,!-!ty !ns+*an%e
o,ta!ned ,y CTI and S!e$ens sha-- !n%-+de CTI and S!e$ens as na$ed !ns+*eds *easona,-y
a%%e'ta,-e to CTI and S!e$ens. CTI and S!e$ens "+*the* a2*ee1 as a %ont!n+!n2 o,-!2at!on a"te*
the te*$ he*eo"1 to $a!nta!n s+%h !ns+*an%e #!th no -ess than the %oe*a2e s'e%!"!ed a,oe !n
"+-- "o*%e and e""e%t "o* the "+-- -!"e o" the CPS P*od+%ts so-d he*e+nde*. CTI and S!e$ens sha--
s+''-y ea%h othe* #!th a Ce*t!"!%ate o" Ins+*an%e +'on #*!tten *e>+est ,y S!e$ens o* CTI.
2R-ICLE 1%
DI1+0-E RE13L0-I3N
10.1 A*,!t*at!on. E6%e't "o* M!) %-a!$s *es+-t!n2 "*o$ an a--e2ed ,*ea%h o" a 'a*tyHs
%on"!dent!a-!ty o,-!2at!ons he*e+nde* o* !n"*!n2e$ent o" a 'a*tyHs te%hno-o2y o* so"t#a*e1 o* M!!)
s!t+at!ons !n #h!%h a 'a*ty $ay s+""e* !**e'a*a,-e ha*$1 any %ont*oe*sy o* %-a!$ ,et#een the 'a*t!es
a*!s!n2 o+t o" o* *e-at!n2 to th!s A2*ee$ent #h!%h %annot ,e sett-ed ,y $+t+a- a2*ee$ent o" the
'a*t!es !n -!e+ o" the !nst!t+t!on o" -e2a- '*o%eed!n2s ,y e!the* 'a*ty sha-- ,e s+,$!tted to ,!nd!n2
a*,!t*at!on on the te*$s set "o*th !n the Jo!nt Dent+*e A2*ee$ent.
10.0 Re-ease o" S!e$ens ,y CTI. ;o* and !n %ons!de*at!on o" the '*o$!ses $ade ,y
S!e$ens set "o*th he*e!n1 the ade>+a%y and s+""!%!en%y o" #h!%h he*e,y !s a%.no#-ed2ed1 CTI
he*e,y does *e-ease1 a%>+!t1 *e$!se and "o*ee* d!s%ha*2e S!e$ens1 a-- o" !ts 'ast and '*esent
se*ants1 a2ents1 e$'-oyees1 sha*eho-de*s1 o""!%e*s1 d!*e%to*s1 'a*tne*s1 asso%!ates1 '*!n%!'a-s1
atto*neys1 s+%%esso*s1 '*ede%esso*s1 !ns+*e*s1 and ass!2ns1 and any 'a*ent1 s+,s!d!a*y o* a""!-!ated
ent!t!es "*o$ any and a-- %-a!$s1 %a+ses o" a%t!on1 -!a,!-!t!es1 o,-!2at!ons1 *es'ons!,!-!t!es1
a2*ee$ents1 da$a2es1 a%t!ons1 %osts1 and e6'enses o" any nat+*e #hatsoee*1 !n%-+d!n2 atto*neysH
"ees1 a*!s!n2 o+t o" o* *e-at!n2 to !o-at!ons o* a--e2ed !o-at!ons o" Se%t!on 10.0 the Jo!nt Dent+*e
A2*ee$ent *e-ated to the sa-e o" PET !$a2e d!s'-ay o* !$a2e ana-ys!s #o*.stat!ons1 s'a*e 'a*ts o*
so+*%es1 "*o$ the ,e2!nn!n2 o" t!$e to the E""e%t!e 9ate. No 'o*t!on o" th!s Se%t!on 10.0 sha--
a''-y to $atte*s a*!s!n2 '+*s+ant to th!s A2*ee$ent a"te* the E""e%t!e 9ate.
10.4 Re-ease o" CTI ,y S!e$ens. ;o* and !n %ons!de*at!on o" the '*o$!ses $ade ,y CTI
set "o*th he*e!n1 the ade>+a%y and s+""!%!en%y o" #h!%h he*e,y !s a%.no#-ed2ed1 S!e$ens he*e,y
does *e-ease1 a%>+!t1 *e$!se and "o*ee* d!s%ha*2e CTI1 a-- o" !ts 'ast and '*esent se*ants1
a2ents1 e$'-oyees1 sha*eho-de*s1 o""!%e*s1 d!*e%to*s1 'a*tne*s1 asso%!ates1 '*!n%!'a-s1 atto*neys1
s+%%esso*s1 '*ede%esso*s1 !ns+*e*s1 and ass!2ns1 and any 'a*ent1 s+,s!d!a*y o* a""!-!ated ent!t!es
"*o$ any and a-- %-a!$s1 %a+ses o" a%t!on1 -!a,!-!t!es1 o,-!2at!ons1 *es'ons!,!-!t!es1 a2*ee$ents1
da$a2es1 a%t!ons1 %osts1 and e6'enses o" any nat+*e #hatsoee*1 !n%-+d!n2 atto*neysH "ees1 a*!s!n2
o+t o" o* *e-at!n2 to !o-at!ons o* a--e2ed !o-at!ons o" Se%t!on 11.8 o" the Jo!nt Dent+*e
A2*ee$ent *e-ated to the sa-e o" PET !$a2e d!s'-ay o* !$a2e ana-ys!s #o*.stat!ons1 s'a*e
'a*ts o* so+*%es1 "*o$ the ,e2!nn!n2 o" t!$e to the E""e%t!e 9ate. No 'o*t!on o" th!s Se%t!on
10.4 sha-- a''-y to $atte*s a*!s!n2 '+*s+ant to th!s A2*ee$ent a"te* the E""e%t!e 9ate.
10.8 Re-ease ,y CPS. ;o* and !n %ons!de*at!on o" the '*o$!ses $ade ,y CTI and S!e$ens set
"o*th he*e!n1 the ade>+a%y and s+""!%!en%y o" #h!%h he*e,y !s a%.no#-ed2ed1 CPS he*e,y does
*e-ease1 a%>+!t1 *e$!se and "o*ee* d!s%ha*2e CTI and S!e$ens1 a-- o" the!* *es'e%t!e 'ast and
'*esent se*ants1 a2ents1 e$'-oyees1 sha*eho-de*s1 o""!%e*s1 d!*e%to*s1 'a*tne*s1 asso%!ates1
'*!n%!'a-s1 atto*neys1 s+%%esso*s1 '*ede%esso*s1 !ns+*e*s1 and ass!2ns1 and any o" the!* *es'e%t!e
'a*ent1 s+,s!d!a*y o* a""!-!ated ent!t!es "*o$ any and a-- %-a!$s1 %a+ses o" a%t!on1 -!a,!-!t!es1
o,-!2at!ons1 *es'ons!,!-!t!es1 a2*ee$ents1 da$a2es1 a%t!ons1 %osts1 and e6'enses o" any nat+*e
#hatsoee*1 !n%-+d!n2 atto*neysH "ees1 a*!s!n2 o+t o" o* *e-at!n2 to !o-at!ons o* a--e2ed !o-at!ons o"
Se%t!ons 11.8 o* 10.0 o" the Jo!nt Dent+*e A2*ee$ent *e-ated to the sa-e o" PET !$a2e d!s'-ay o*
!$a2e ana-ys!s #o*.stat!ons1 s'a*e 'a*ts o* so+*%es1 "*o$ the ,e2!nn!n2 o" t!$e to the E""e%t!e
9ate. No 'o*t!on o" th!s Se%t!on 10.8 sha-- a''-y to $atte*s a*!s!n2 '+*s+ant to th!s A2*ee$ent
a"te* the E""e%t!e 9ate.
10.( 9en!a- o" Ad$!ss!ons. The 'a*t!es he*e,y a2*ee that the *e-eases set "o*th !n Se%t!ons
10.01 10.41 and 10.8 o" th!s A2*ee$ent sha-- not ,e dee$ed to ,e an ad$!ss!on ,y any 'a*ty o" any
!o-at!on o" any '*o!s!on o" the Jo!nt Dent+*e A2*ee$ent.
10.< Sa-e o" Wo*.stat!ons. The Pa*t!es he*e,y a2*ee to a$end the Jo!nt Dent+*e A2*ee$ent to
'*o!de that "+t+*e sa-es o" PET !$a2e d!s'-ay and !$a2e ana-ys!s #o*.stat!ons Mas o''osed to
those #o*.stat!ons that '*o!de PET *e%onst*+%t!on o* !$a2e %o**e%t!on %a'a,!-!ty1 #h!%h sha--
%ont!n+e to ,e e6%-+ded as 'a*t o" the CPS B+s!ness) ,y e!the* CTI o* S!e$ens '+*s+ant to the
te*$s o" th!s A2*ee$ent sha-- not %onst!t+te a ,*ea%h o" the %oenant not to %o$'ete %onta!ned !n
the Jo!nt Dent+*e A2*ee$ent.
2R-ICLE 1*
2DDI-I3N2L C3>EN2N-1
14.1 ;+*the* Ass+*an%es. CTI1 CPS1 and S!e$ens sha-- %oo'e*ate *easona,-y #!th ea%h
othe* !n %onne%t!on #!th any ste's *e>+!*ed to ,e ta.en as 'a*t o" the!* *es'e%t!e o,-!2at!ons +nde*
th!s A2*ee$ent1 and sha-- !) "+*n!sh +'on *e>+est to ea%h othe* s+%h "+*the* !n"o*$at!onm !!) e6e%+te
and de-!e* to ea%h othe* s+%h othe* a2*ee$ents1 %e*t!"!%ates1 do%+$ents1 and !nst*+$entsm and !!!) do
s+%h othe* a%ts and th!n2s1 a-- as any othe* 'a*ty to th!s A2*ee$ent *easona,-y $ay *e>+est "o*
the '+*'ose o" %a**y!n2 o+t the !ntent o" th!s A2*ee$ent and the t*ansa%t!ons %onte$'-ated he*e,y.
14.0 Ass!2n$ent o" Cont*a%ts. In the eent that the t*ansa%t!ons %onte$'-ated ,y th!s
A2*ee$ent *e>+!*e the sa-e1 ass!2n$ent1 ass+$'t!on1 t*ans"e*1 %oneyan%e1 o* de-!e*y ,y any
'a*ty he*eto Mthe KASSIANORK) to anothe* 'a*ty he*eto Mthe KASSIANEEK) o" any %ont*a%t to
#h!%h the Ass!2no* !s a 'a*ty1 and !" e!the* M6) the '*o!s!ons o" s+%h %ont*a%t Mthe
KRESTRICTE9 CONTRACTK) '*oh!,!t s+%h ass!2n$ent1 o* My) the '*o!s!ons o" the Rest*!%ted
Cont*a%t *e>+!*e the %onsent o" any othe* 'a*ty to s+%h sa-e1 ass!2n$ent1 ass+$'t!on1 t*ans"e*1
%oneyan%e1 o* de-!e*y and s+%h othe* 'a*ty #!thho-ds1 +n*easona,-y de-ays1 o* +n*easona,-y
%ond!t!ons s+%h %onsent1 thenB
Ma) Not#!thstand!n2 any othe* '*o!s!on he*eo"1 ne!the* th!s A2*ee$ent no* any othe*
do%+$ent *e-ated to the %ons+$$at!on o" the t*ansa%t!ons %onte$'-ated he*e,y sha-- %onst!t+te a
sa-e1 ass!2n$ent1 ass+$'t!on1 t*ans"e*1 %oneyan%e1 o* de-!e*y o* an atte$'ted sa-e1 ass!2n$ent1
ass+$'t!on1 t*ans"e*1 %oneyan%e 1o* de-!e*y o" the Rest*!%ted Cont*a%tm and
M,) The Ass!2no* and the Ass!2nee sha-- %oo'e*ate #!th ea%h othe* !n any *easona,-e and
-a#"+- a**an2e$ents des!2ned to '*o!de to the Ass!2nee the ,ene"!ts o" +se o" the Rest*!%ted
Cont*a%t "o* the te*$ the*eo" Mo* any *!2ht o* ,ene"!t a*!s!n2 the*e+nde*1 !n%-+d!n2 the en"o*%e$ent
"o* the ,ene"!t o" the Ass!2nee o" any and a-- *!2hts o" the Ass!2no* a2a!nst a th!*d 'a*ty
the*e+nde*)m and
M%) The Ass!2no* and the Ass!2nee sha-- +se the!* *es'e%t!e ,est e""o*ts1 and sha--
%oo'e*ate #!th ea%h othe*1 to o,ta!n the %onsent to the ass!2n$ent o" the Rest*!%ted Cont*a%t as
>+!%.-y as '*a%t!%a,-e.
On%e %onsent "o* the sa-e1 ass!2n$ent1 ass+$'t!on1 t*ans"e*1 %oneyan%e and de-!e*y o" a
Rest*!%ted Cont*a%t !s o,ta!ned1 the Ass!2no* '*o$'t-y sha-- ass!2n1 t*ans"e*1 %oney1 and de-!e*
the Rest*!%ted Cont*a%t to the Ass!2nee1 and the Ass!2nee sha-- ass+$e the o,-!2at!ons +nde* the
Rest*!%ted Cont*a%t ass!2ned to the Ass!2nee "*o$ and a"te* the date o" ass!2n$ent to the Ass!2nee.
2R-ICLE 14
MI1CELL2NE301
18.1 Re-at!onsh!'. Noth!n2 !n th!s A2*ee$ent sha-- ,e %onst*+ed to *ende* any 'a*ty the
e$'-oye* o* e$'-oyee o" any othe* 'a*ty1 the a2ent o* '*!n%!'a- o" any othe* 'a*ty1 o* a Co!nt
ent+*e* o* $e$,e* o" any othe* 'a*ty. No 'a*ty sha-- hae the *!2ht to ,!nd any othe* 'a*ty1 to
e6e*%!se %ont*o- o" any othe* 'a*ty1 o* to %ond+%t any othe* 'a*tyHs ,+s!ness1 e6%e't as e6'*ess-y set
"o*th !n th!s A2*ee$ent.
18.0 ;o*%e MaCe+*e P*o!s!on. No 'a*ty he*eto sha-- ,e -!a,-e "o* any de-ay a*!s!n2 "*o$
+nant!%!'ated %atast*o'h!% %!*%+$stan%es ,eyond !ts *easona,-e %ont*o- !n%-+d!n21 ,+t not
-!$!ted to1 a%ts o" Aod1 #a*1 *!ot o* %!!- %o$$ot!on1 "!*e1 "-ood1 te**o*!s$1 d*o+2ht o* a%t o"
2oe*n$ent MK;ORCE MAJEURE EDENTSK)m '*o!ded1 that the 'a*ty see.!n2 to ,e e6%+sed
sha-- $a.e ee*y *easona,-e e""o*t to $!n!$!Ee the de-ay *es+-t!n2 the*e"*o$. Ea%h 'a*ty sha-- .ee'
the othe* 'a*t!es "+--y !n"o*$ed o" any s+%h %!*%+$stan%es. 9+*!n2 the 'e*!od that the 'e*"o*$an%e
,y one o" the 'a*t!es o" !ts o,-!2at!ons +nde* th!s A2*ee$ent !s ,een s+s'ended ,y *eason o" a ;o*%e
MaCe+*e Eent1 a-- 'a*t!es to th!s A2*ee$ent sha-- %oo'e*ate and +se the!* %o$$e*%!a--y *easona,-e
,est e""o*ts to %ont!n+e the ,+s!ness %onte$'-ated ,y th!s A2*ee$entm '*o!ded1 that any Una""e%ted
Pa*ty $ay M,+t sha-- not ,e *e>+!*ed to) s+s'end 'e*"o*$an%e o" a-- o* 'a*t o" !ts o,-!2at!ons
he*e+nde* to the e6tent that s+%h s+s'ens!on !s %o$$e*%!a--y *easona,-e. The 'a*t!es a2*ee to
*es+$e the!* 'e*"o*$an%e +nde* th!s A2*ee$ent as soon as 'oss!,-e +'on the 'ass!n2 o" the ;o*%e
MaCe+*e Eent.
18.4 Ass!2n$ent. No 'a*ty sha-- hae the *!2ht to ass!2n o* othe*#!se t*ans"e* !ts *!2hts and
o,-!2at!ons +nde* th!s A2*ee$ent e6%e't #!th the '*!o* #*!tten %onsent o" the othe* 'a*t!esm
'*o!ded1 ho#ee*1 S!e$ens and CTI sha-- ea%h ,e ent!t-ed to ass!2n any o* a-- o" !ts *!2hts and
o,-!2at!ons he*e+nde* to any o" !ts %ont*o--ed s+,s!d!a*!es1 '*o!ded that ,oth S!e$ens and CTI1
as a''-!%a,-e1 sha-- *e$a!n "+--y -!a,-e "o* the 'e*"o*$an%e o" a-- !ts o,-!2at!ons he*e+nde*m and
"+*the* '*o!ded that a s+%%esso* !n !nte*est ,y $e*2e*1 ,y o'e*at!on o" -a#1 ass!2n$ent1 '+*%hase
o* othe*#!se o" the ent!*e ,+s!ness o" e!the* 'a*ty sha-- a%>+!*e a-- *!2hts and o,-!2at!ons o" s+%h
'a*ty he*e+nde*. Any '*oh!,!ted ass!2n$ent sha-- ,e n+-- and o!d.
18.8 Not!%es. A-- not!%es o* othe* %o$$+n!%at!on #h!%h a*e *e>+!*ed o* 'e*$!tted he*e+nde*
sha-- ,e !n #*!t!n2 and s+""!%!ent !" de-!e*ed ,y hand1 ,y "a%s!$!-e o* te-e%o'!e* t*ans$!ss!on Mand
a t*ans$!ss!on %on"!*$at!on !s *e%e!ed ,y the sende*)1 o* ,y a *e%o2n!Eed !nte*nat!ona- o*
oe*n!2ht %o+*!e*1 to the 'e*sons at the add*esses set "o*th ,e-o# Mo* at s+%h othe* add*ess as $ay ,e
'*o!ded he*e+nde*)1 and sha-- ,e dee$ed to hae ,een de-!e*ed as o" the date so de-!e*ed.
S!e$ensB S!e$ens N+%-ea* Med!%!ne A*o+'
4()1 No*th Ba**!n2ton Road
Ho""$an Estates1 I--!no!s <)1@(
;a%s!$!-eB M88=) 4)87=)8)
Attent!onB P*es!dent1 S!e$ens N+%-ea* Med!%!ne
W!th %o'!es toB S!e$ens Med!%a- So-+t!ons USA1 In%.
(1 Da--ey St*ea$ Pa*.#ay
Ma-e*n1 PA 1@4((
;a%s!$!-eB
Attent!onB P*es!dent L CEO
and Asso%!ate Aene*a- Co+nse-
S!e$ens Ge2a- 9e'a*t$ent J71<
(1 Da--ey St*ea$ Pa*.#ay
Ma-e*n1 PA 1@4((
CTIB CTI Mo-e%+-a* I$a2!n21 In%.
81) Innoat!on 9*!e
/no6!--e1 TN 4=@40
;a6 No.B 8<(01874)1<
Attent!onB P*es!dent
W!th a %o'y toB CTI Mo-e%+-a* I$a2!n21 In%.
81) Innoat!on 9*!e
/no6!--e1 TN 4=@40
;a6 No.B 8<(01870=<)
Attent!onB Aene*a- Co+nse-
CPSB CPS Innoat!ons
81) Innoat!on 9*!e
/no6!--e1 TN 4=@40
;a6 No.B 8<(018708=8
Attent!onB P*es!dent
W!th a %o'y toB /!-'at*!%. Sto%.ton GGP
S+!te @))
<)= 18th St*eet
Wash!n2ton1 9C 0)))(70)18
;a6 No.B 0)0 (8( )))0
Attent!onB 9a!d A. Sto%.ton
18.( Ent!*e A2*ee$ent. Th!s A2*ee$ent1 !n%-+d!n2 the s%hed+-es atta%hed he*eto and
!n%o*'o*ated as an !nte2*a- 'a*t o" th!s a2*ee$ent1 %onst!t+tes the ent!*e A2*ee$ent o" the 'a*t!es
#!th *es'e%t to the s+,Ce%t $atte* he*eo"1 and s+'e*sedes any and a-- '*e!o+s A2*ee$ents ,y and
,et#een CPS1 S!e$ens and CTI #!th *es'e%t to the s+,Ce%t $atte* he*eo"1 !" any1 as #e-- as any
and a-- '*o'osa-s1 o*a- o* #*!tten1 and a-- ne2ot!at!ons1 %one*sat!ons o* d!s%+ss!ons he*eto"o*e had
,et#een the 'a*t!es *e-ated to th!s a2*ee$ent.
18.< A$end$ent. Th!s A2*ee$ent sha-- not ,e dee$ed o* %onst*+ed to ,e $od!"!ed1 a$ended1
*es%!nded1 %an%e-ed o* #a!ed1 !n #ho-e o* !n 'a*t1 e6%e't ,y #*!tten a$end$ent s!2ned ,y the
'a*t!es he*eto.
18.= P+,-!%!ty. Th!s A2*ee$ent !s %on"!dent!a- and no 'a*ty sha-- !ss+e '*ess *e-eases o* en2a2e
!n othe* ty'es o" '+,-!%!ty o" any nat+*e dea-!n2 #!th the %o$$e*%!a- and -e2a- deta!-s o" th!s
A2*ee$ent #!tho+t the othe* 'a*t!esH '*!o* #*!tten a''*oa-1 #h!%h a''*oa- sha-- not ,e
+n*easona,-y #!thhe-d. Ho#ee*1 a''*oa- o" s+%h d!s%-os+*e sha-- ,e dee$ed to ,e 2!en to the
e6tent s+%h d!s%-os+*e !s *e>+!*ed to %o$'-y #!th 2oe*n$enta- *+-es1 *e2+-at!ons o* othe*
2oe*n$enta- *e>+!*e$ents. In s+%h eent1 the '+,-!sh!n2 'a*ty sha-- '*o$'t-y "+*n!sh a %o'y o"
s+%h d!s%-os+*e to the othe* 'a*t!es. Not#!thstand!n2 the "o*e2o!n21 CPS1 S!e$ens and CTI sha-- ,e
'e*$!tted to "!-e th!s A2*ee$ent and to d!s%-ose the te*$s o" th!s A2*ee$ent !n the!* *es'e%t!e "!-!n2s
#!th the U.S. Se%+*!t!es and E6%han2e Co$$!ss!on o* any s!$!-a* state a2en%y.
18.8 See*a,!-!ty. In the eent that any o" the te*$s o" th!s A2*ee$ent a*e !n %on"-!%t #!th any
*+-e o" -a# o* stat+to*y '*o!s!on o* a*e othe*#!se +nen"o*%ea,-e +nde* the -a#s o* *e2+-at!ons o"
any 2oe*n$ent o* s+,d!!s!on the*eo"1 s+%h te*$s sha-- ,e dee$ed st*!%.en "*o$ th!s
A2*ee$ent1 ,+t s+%h !na-!d!ty o* +nen"o*%ea,!-!ty sha-- not !na-!date any o" the othe* te*$s o"
th!s A2*ee$ent and th!s A2*ee$ent sha-- %ont!n+e !n "o*%e1 +n-ess the !na-!d!ty o* +nen"o*%ea,!-!ty
o" any s+%h '*o!s!ons he*eo" does s+,stant!a- !o-en%e to1 o* #he*e the !na-!d o* +nen"o*%ea,-e
'*o!s!ons %o$'*!se an !nte2*a- 'a*t o"1 o* a*e othe*#!se !nse'a*a,-e "*o$1 the *e$a!nde* o" th!s
A2*ee$ent.
18.@ Co+nte*'a*ts. Th!s A2*ee$ent sha-- ,e e6e%+ted !n th*ee o* $o*e %o+nte*'a*ts1 and ea%h
s+%h %o+nte*'a*t sha-- ,e dee$ed an o*!2!na- he*eo".
18.1) Wa!e*. No "a!-+*e o* de-ay ,y any 'a*ty to ta.e any a%t!on o* asse*t o* e6e*%!se any
*!2ht o* *e$edy he*e+nde* sha-- o'e*ate o* ,e dee$ed to ,e a #a!e* o" s+%h *!2ht o* *e$edy !n
the eent o" the %ont!n+at!on o* *e'et!t!on o" the %!*%+$stan%es 2!!n2 *!se to s+%h *!2htm no* sha--
any s!n2-e o* 'a*t!a- e6e*%!se o" s+%h *!2ht o* *e$edy '*e%-+de any othe* o* "+*the* e6e*%!se
the*eo" o* o" any othe* *!2ht o* *e$edy. No '*o!s!on o" th!s A2*ee$ent $ay ,e #a!ed e6%e't !n a
#*!t!n2 s!2ned ,y the 'a*ty 2*ant!n2 s+%h #a!e*. Q+yvn ty ,Y tha% h!`n. /hpn2 %_ S!v+ .hoXn nQo
t*on2 hU' S]n2 nQy %ho 'h{' ty ,Y nc+ .hpn2 STU% ,Nn .!a %hf' th+Zn ,hn2 n ,Xn.
18.11 A+tho*!Eat!on and E6e%+t!on. By e6e%+t!n2 th!s A2*ee$ent ea%h 'a*ty *e'*esents and
#a**ants to the othe* 'a*t!es M!) that the ent*y !nto and e6e%+t!on and 'e*"o*$an%e o" th!s A2*ee$ent
has ,een "+--y and d+-y a+tho*!Eed ,y a-- *e>+!*ed %o*'o*ate a%t!on1 and M!!) that the 'e*son
s!2n!n2 th!s A2*ee$ent on ,eha-" o" a 'a*ty has ,een "+--y a+tho*!Eed ,y a-- *e>+!*ed %o*'o*ate
a%t!on to e6e%+te th!s A2*ee$ent on ,eha-" o" the 'a*ty "o* #h!%h s+%h 'e*son !s s!2n!n2.
18.10 Con"!dent!a-!ty. Ea%h 'a*ty he*eto a2*ees not to d!s%-ose to othe*s the te%hn!%a- and
,+s!ness !n"o*$at!on o" the othe* 'a*t!es he*eto MKCON;I9ENTIAG IN;ORMATIONK)1 and
a2*ees to +se the othe* 'a*t!esH Con"!dent!a- In"o*$at!on on-y "o* the !$'-e$entat!on o" th!s
A2*ee$ent and to ho-d the othe* 'a*t!esH Con"!dent!a- In"o*$at!on %on"!dent!a- +s!n2 at a $!n!$+$
the sa$e %a*e !t #o+-d e6e*%!se to '*ote%t !ts o#n Con"!dent!a- In"o*$at!on ,+t !n no eent -ess
than a *easona,-e de2*ee o" %a*e. The *e%e!!n2 'a*ty "+*the* a2*ees to d!s%-ose the Con"!dent!a-
In"o*$at!on o" the d!s%-os!n2 'a*ty on-y to the *e%e!!n2 'a*tyHs e$'-oyees and a2ents #ho hae a
need to .no# and on-y to those e$'-oyees and a2ents #ho hae a2*eed !n #*!t!n2 to %on"!dent!a-!ty
o,-!2at!ons s+,stant!a--y s!$!-a* to those !n th!s Se%t!on 18.10. The *e%e!!n2 'a*ty sha-- not 'e*$!t
any o" !ts 'e*sonne- to *e$oe any '*o'*!eta*y o* othe* -e2end o* *est*!%t!e not!%e %onta!ned o*
!n%-+ded !n any Con"!dent!a- In"o*$at!on '*o!ded ,y the d!s%-os!n2 'a*ty1 and the *e%e!!n2
'a*ty sha-- not 'e*$!t any o" !ts 'e*sonne- to *e'*od+%e o* %o'y any s+%h Con"!dent!a- In"o*$at!on
e6%e't as e6'*ess-y a+tho*!Eed +nde* th!s A2*ee$ent. P*o!ded1 ho#ee*1 that s+%h
%on"!dent!a-!ty o,-!2at!on sha-- not a''-y to any !n"o*$at!on #h!%h Ma) !s no# o* he*ea"te* ,e%o$es
a 'a*t o" the '+,-!% do$a!n1 othe* than ,y a%t o* o$!ss!on o" the *e%e!!n2 'a*ty1 M,) #as
!nde'endent-y dee-o'ed ,y the *e%e!!n2 'a*ty o* !ts a""!-!atesm M%) !n"o*$at!on that #as !n s+%h
'a*tyHs 'ossess!on '*!o* to d!s%-os+*e ,y the othe* 'a*ty1 Md) !s he*ea"te* "+*n!shed to the *e%e!!n2
'a*ty ,y a th!*d 'a*ty1 as a $atte* o" *!2ht and #!tho+t *est*!%t!on on +se o* d!s%-os+*e1 #ho
-a#"+--y 'ossesses s+%h !n"o*$at!on and d!d not a%>+!*e !t d!*e%t-y o* !nd!*e%t-y "*o$ the othe*
'a*ty1 Me) !s d!s%-osed !n any U.S. o* "o*e!2n 'atent1 o* '+,-!shed 'atent a''-!%at!on1 #hethe*
o#ned ,y the othe* 'a*ty o* any th!*d 'a*ty1 o* M") !s *e>+!*ed to ,e d!s%-osed to a 2oe*n$ent
a2en%y o* '+*s+ant to a C+d!%!a- '*o%eed!n21 ,+t on-y to the e6tent so *e>+!*ed and '*o!ded that the
*e%e!!n2 'a*ty 2!es the d!s%-os!n2 'a*ty adan%e not!%e o" s+%h d!s%-os+*e and *easona,-y
%oo'e*ates #!th the d!s%-os!n2 'a*ty Mat the d!s%-os!n2 'a*tyHs e6'ense) to %ontest s+%h d!s%-os+*e.
The d+*at!on o" th!s %on"!dent!a-!ty o,-!2at!on sha-- ,e "o* the te*$ o" th!s A2*ee$ent and "o* t#o
M0) yea*s the*ea"te* #!th *es'e%t to any Con"!dent!a- In"o*$at!on that does not %onst!t+te a Kt*ade
se%*etK +nde* a''-!%a,-e -a#1 and "o* Con"!dent!a- In"o*$at!on that does %onst!t+te a t*ade
se%*et +nde* a''-!%a,-e -a#1 these %on"!dent!a-!ty o,-!2at!ons sha-- -ast !n 'e*'et+!ty. Noth!n2 !n th!s
Se%t!on !s !ntended ,y the 'a*t!es to a,*o2ate any *!2hts o* o,-!2at!ons o" the 'a*t!es +nde*
%o$$on -a# o* stat+to*y -a# #!th *es'e%t to the +se and d!s%-os+*e o" %on"!dent!a- !n"o*$at!on o*
t*ade se%*ets.
18.14 S+*!a-. The '*o!s!ons !n Se%t!on 18.10 sha-- s+*!e the e6'!*at!on o* te*$!nat!on
o" th!s A2*ee$ent !nde"!n!te-y.
18.18 Aoe*n!n2 Ga#. Th!s A2*ee$ent sha-- ,e 2oe*ned ,y1 %onst*+ed +nde*1 and
!nte*'*eted !n a%%o*dan%e #!th the -a#s o" the State o" 9e-a#a*e1 U.S.A1 a''-!%a,-e to %ont*a%ts
$ade and 'e*"o*$ed ent!*e-y #!th!n that state.
SIANATURE PAAE ;OGGOWS
IN WITNESS WHEREO;1 the 'a*t!es hae %a+sed th!s A2*ee$ent to ,e
e6e%+ted as o" the E""e%t!e 9ate.
CTI MOGECUGAR IMAAINA1 INC.
ByB s Rona-d N+tt
77777777777777777777777777777777777
Rona-d N+tt1 Ph.9.
P*es!dent
SIEMENS ME9ICAG SOGUTIONS USA1 INC.
ByB s Tho$as N. M%Ca+s-and
77777777777777777777777777777777777
Tho$as N. M%Ca+s-and
P*es!dent
CTI PET S:STEMS1 INC.
ByB s R. A*e2o*y B*o'hy
77777777777777777777777777777777777
R. A*e2o*y B*o'hy
P*es!dent
Chapter 3 (P. 115)
NEGOTIATING INSPECTION AND DEFECTS LIABILITY
1. Exporting an= t.e +ro"#em of /9a#it$
THE PROBLEM
E6'o*t $a*.ets a*e o"ten "a* a#ay. When th!n2s
2o #*on2 #!th '*od+%ts1 *e'a!* and *e'-a%e$ent
%an ,e *+!no+s-y e6'ens!e. What s'e%!a- ste's
%an the e6'o*te* ta.e to $!n!$!Ee the *!s. o" the
2oods ,e!n2 *eCe%ted o* o" heay de"e%ts -!a,!-!ty
Th\
%-a!$s&
THE PRINCIPLE
The "!*st ste's an e6'o*te* sho+-d ta.e a*e to
ens+*e that a-- e6'o*ted 2oods $eet o*
e6%eed the >+a-!ty s'e%!"!ed1 that $a*.!n2
and 'a%.a2!n2 a*e %o**e%t1 and that de-!e*y
!s on t!$e. Se%ond-y1 the a2*ee$ent ,et#een
the 'a*t!es sho+-d %onta!n s'e%!"!% >+a-!ty
s'e%!"!%at!onsm deta!-ed s'e%!"!%at!on *ed+%es
the %han%e o" a d!s'+te ,e%a+se !t '*o!des a
%-ea* and o,Ce%t!e standa*d that the 2oo+s
$+st $eet.
IN MORE DEPTH
No $an+"a%t+*e* '*od+%es 'e*"e%t '*od+%ts ee*y
t!$e. Een so1 >+a-!ty !s a .ey !ss+e1 and %+sto$e*
sat!s"a%t!on !s essent!a- to s+%%ess"+- ,+s!ness.
Many %o$'an!es hae >+a-!ty ass+*an%e '*o2*a$s
to ens+*e that %+sto$e*s 2et #hat they 'ay "o*.
Unt!- th!n2s a*e 2o!n2 #e-- !n the -o%a- $a*.et1 !t
$a.es -!tt-e sense to e6'o*t1 ,e%a+se >+a-!ty
ass+*an%e and %+sto$e* sat!s"a%t!on a*e $+%h
*o+2he* !ss+es #hen the %+sto$e* !s !n anothe*
%o+nt*y1 and #hen d!stan%e $a.es
%o$$+n!%at!on1 t*ans'o*t1 !ns'e%t!on1 'ay$ent1
and e*!"!%at!on o" %-a!$s e6'ens!e and t!$e
%ons+$!n2. Be"o*e -oo.!n2 !n deta!- at !ns'e%t!on1
de"e%ts -!a,!-!ty and the othe* !ss+es1 -etHs t*a%e the
%o+*se o" an e6'o*ted '*od+%t "*o$ $an+"a%t+*e
th*o+2h to the end o" the de"e%ts -!a,!-!ty 'e*!od
and see #he*e the e6'o*te* !s at *!s..

,cenario- De*,ena E-e%t*!% !s se--!n2 -!2ht#e!2ht head'hones #!th a ,+!-t7!n AM;M *ad!o. The
e>+!'$ent *+ns on a s!n2-e AAA ,atte*y. The %+sto$e* !s E+*oeast I$'e61 a '+*%has!n2 ho+se !n an
East E+*o'ean %o+nt*y #!th a h+2e $a*.et "o* $ode*n1 h!2h >+a-!ty e>+!'$ent7 '*o!ded the '*!%e !s
*!2ht. The t#o s!des hae a2*eed an ;OB MPo*t De*,ena) '*!%e o" k0.=8 'e* +n!t1 e6%-+d!n2 ,atte*y.
Q+a-!ty !s an !ss+e "*o$ the sta*t o" ne2ot!at!ons. E+*oeast #ants a '*od+%t !t %an se-- !n tens o"
tho+sands. B+t1 des'!te the -o# '*!%e1 th!s !s not a th*o#7a#ay '*od+%t7 the end +se* #ants
head'hones that #!-- -ast at -east s!6 $onths. Ho# does E+*oeast 2et the >+a-!ty !t #ants.
CONCEPT RE'IE#8 C#ose ;nit
De*,ena /n!-s !s se--!n2 (1))) s#eate*s to an !$'o*te* !n Nona$!a1 a %o+nt*y 81))) $!-es a#ay. The
Mona$!an ,+ye* a2*ees to 'ay ,y -ette* o" %*ed!t1 ,+t not ,y con#irme+ -ette* o" %*ed!t. 9e-!e*y !s to
,e $ade 99P MPo*t Ne$o). As to s'e%!"!%at!ons1 the ,+ye*3s 2ene*a- %ond!t!ons o" '+*%hase stateB
KThe >+a-!ty o" a-- de-!e*!es sha-- ,e !n a%%o*dan%e #!th the %+sto$s o" the t*ade as '*a%t!%ed !n the
Re'+,-!% o" Nona$!a.K And "+*the*1 5C-ea*-y de"e%t!e 2oods $ayH,e *eCe%ted on a**!a-7and *et+*ned
to e6'o*te* at the e6'o*te*Hs *!s. and %ost.K The ,+ye* #ants to ,+y "*o$ De*,ena /n!ts on these
-oose and so$e#hat !n"o*$a- te*$s.
Whe*e do yo+ see dan2e* "o* the e6'o*te*& I" the*e !s KSo$e 9an2e*K o* KA*eat
9an2e*1? #hat !s the dan2e* yo+ "o*esee &
1. In the te*$s o" the -ette* o" %*ed!t& ..........................................................
NO 9ANCER SOME 9ANAER AREAT 9ANAER
0. In the 99P de-!e*y&..........................................................................
NO 9ANCER SOME 9ANAER AREAT 9ANAER
4. In the -a%. o" deta!-ed >+a-!ty s'e%!"!%at!on&................................................
NO 9ANCER SOME 9ANAER AREAT 9ANAER
8. In the K*eCe%t!on on a**!a-K '*o!s!on& ...................................... ...
. NO 9ANCER SOME 9ANAER AREAT 9ANAER
.(. In the +n+s+a--y 2eo2*a'h!%a- d!stan%e ,et#een e6'o*te* and ,+ye*&J......
NO 9ANCER SOME 9ANAER AREAT 9ANAER
1. So$e dan2e*. An +n%on"!*$ed -ette* o" %*ed!t !s -!a,-e to see*e de-ay !n 'ay$entm the ,+ye*Hs
,an. Mand the*e"o*e to so$e e6tent the ,+ye*) ta.e %ont*o- o" 'ay$ent.
0. So$e dan2e*. The e6'o*te* ,ea*s the *!s. o" the 2oods not on-y d+*!n2 the!*
oya2e ,+t a-so th*o+2h %+sto$s and d+*!n2 t*ans'o*tat!on !n the ,+ye*Hs
%o+nt*y. Th!s %an %a+se '*o,-e$s.
4. A*eat dan2e*. The *!2ht o" the ,+ye* to *et+*n K%-ea*-y de"e%t!eK 2oods needs
%-ose de"!n!t!onB "+-- s'e%!"!%adon !s the on-y #ay.
8. So$e dan2e*. The ,+ye* has the *!2ht to *eCe%t de"e%t!e 2oods +nde*$ost
a''-!%a,-e -a#s. The '*o,-e$1 as #!th >+est!on 41 !s to de"!ne Kde"e%t!e.K
(. So$e dan2e*. I" anyth!n2 2oes #*on21 the %ost o" '+tt!n2 th!n2s *!2ht !n%*eases #!th d!stan%e.
B
:.at 7o9 1.o9#= ;no)
1. 9e-!e*y o" 'oo* >+a-!ty '*od+%ts to e6'o*t $a*.ets !s 'a*t!%+-a*-y dan2e*o+s ,e%a+se the %ost
o" %+*!n2 de"e%ts !s h!2h.
0. To 2+a*d a2a!nst h!2h %osts1 the e6'o*te* sho+-d ,e 'a*t!%+-a*-y %a*e"+- a,o+t >+a-!ty
ass+*an%e.
4. In ne2ot!at!n2 >+a-!ty %-a+ses1 the e6'o*te* sho+-d 'ay s'e%!a- attent!on to deta!-ed1 *ea-!st!%
s'e%!"!%at!on o" the 2oods.
8. Ins'e%t!on '*o!s!ons ,oth ,e"o*e and a"te* de-!e*y $+st ,e ne2ot!ated #!th %a*e.
(. The "!na- >+a-!ty h+*d-e !s the de"e%ts -!a,!-!ty 'e*!od d+*!n2 #h!%h the e6'o*te* !s -!a,-e to
%+*e de"e%ts that %o$e to -!2ht !n the 2oods.
A1age <#<B *.% IN1+EC-I3N, 2CCE+-2NCE 2ND REDEC-I3N
THE PROBGEM
When 2oods a*e de-!e*ed1 the ,+ye* !ns'e%ts the$. What a*e the ,+ye*3s *!2hts o" *eCe%t!on& Unde*
#hat %!*%+$stan%es %an the ,+ye* %an%e- the %ont*a%t&
PRINCIPGE
The ,+ye* has the *!2ht to !ns'e%t the 2oods and to *eCe%t the$ !" they do not %on"o*$ #!th the
%ont*a%t. Unde* %e*ta!n %!*%+$stan%es1 the ,+ye* $ay %an%e- the %ont*a%t1 tho+2h no*$a--y the
e6'o*te* ta.es o* Mhas the *!2ht to ta.e) %o**e%t!e a%t!on.
IN MORE 9EPTH
An e6'o*te* a2*ees to de-!e* 2oods o" a %e*ta!n >+ant!ty and >+a-!ty. Any de!at!on !s1 essent!a--y1 a
,*ea%h o" %ont*a%t. Ee*yone .no#s1 ho#ee*1 that de-!e*ed 2oods a*e se-do$ 5'e*"e%t.? So$eho#
the ,+ye* $+st ,e '*ote%ted a2a!nst !n"e*!o* 2oods1 and the e6'o*te* $+st ,e '*ote%ted a2a!nst
%an%e--at!on o" the %ont*a%t "o* t*!!a- o* !ns+""!%!ent *easons. The de"e%ts -!a,!-!ty '*o!s!on Mo*
#a**anty) '*o!des th!s do+,-e '*ote%t!onm the e6'o*te* says1 !n e""e%tB 5I '*o$!se to de-!e* 'e*"e%t
2oods1 ,+t1 !" I ,*ea. th!s '*o$!se1 I st!-- hae a %ont*a%t ,e%a+se I #!-- "!6 the '*o,-e$.?
-rans#ate into >ietnamese
C3N-R2C- (3R DI1-RI40-3R15I+ 2<ENC7: DI1-RI40-3R15I+ 2<REEMEN-
THIS AAREEMENT dated the -ast day o" Jan+a*y 0)1) . ,y and ,et#een AAIP PETROGI SPA
S!n2a'o*e ,*an%h ha!n2 a '-a%e o" ,+s!ness at 4)0 O*%ha*d Road 187)0 to 187)8 Ton2 B+!-d!n21
S!n2a'o*e )@04 MKAAIPK)
And K 6666666666666666666 #hose *e2!ste*ed o""!%e !s
66666666666 MK9ISTRIBUTORK) H 1
W!tnessethB
AAIP and 9ISTRIBUTOR he*e,y o&enant an= agree as fo##o)s:
1. 9e"!n!t!ons
As +sed !n th!s A2*ee$ent the "o--o#!n2 te*$s sha-- hae the $ean!n2 set "o*th he*ea"te*B
a) KP*od+%tsK sha-- $ean AAIP G+,*!%ants "o* A+to$ot!e and Ind+st*!a- a''-!%at!on and S'e%!a-
P*od+%ts as -!sted !n the ;!*st ,c*e+!le "o* the d!st*!,+t!on ,y 9!st*!,+to* !n Cons+$e* Pa%.a2es Mas
he*e!na"te* de"!ned) %a**y!n2 the *e2!ste*ed AAIP t*ade$a*.s ando* 2ett!n2 +'m !t !s a2*eed ,y the
'a*t!es he*eto that AAIP o* AAIP A""!-!ates Mas he*e!na"te* de"!ned) $ay "*o$ t!$e to t!$e #!tho+t
ass!2n!n2 any *easons the*eto $a.e !$'*oe$ents to o* %han2es !n the P*od+%ts d+*!n2 the %+**en%y
o" th!s A2*ee$entm s+%h !$'*oe$ent o* %han2es een !" *es+-t!n2 !n a %han2e !n the %ha*a%te*!st!%s
o" the P*od+%ts sha-- not a""e%t the stat+s o" the P*od+%ts as the P*od+%ts and AAIP sha-- not!"y
9ISTRIBUTOR o" s+%h !$'*oe$ent o* %han2es
,) KTe**!to*yK sha-- $ean the So%!a-!st Re'+,-!% o" D!etna$
%) HKCons+$e* Pa%.a2esK sha-- $ean s+%h o*!2!na- standa*d 'a%.a2es "*o$ t!$e to t!$e ado'ted ,y
AAIP
d) KA""!-!ateK sha-- $ean any ent!ty #h!%h !s %ont*o--ed ,y o* !n %ont*o- o" o* +nde* %o$$on %ont*o-
#!th anothe* s'e%!"!ed ent!ty
KCont*o-K sha-- $eanH a 0(n o* -a*2e* o#ne*sh!' o" !ss+ed and o+tstand!n2 ot!n2 se%+*!t!es o*
%o$$on o""!%e*s o* d!*e%to*s o* a %ont*a%t+a- *e-at!onsh!' a--o#!n2 one ent!ty to ass+$e o*
s+,stant!a--y !n"-+en%e the $ana2e$ent o* o'e*at!ons o" anothe*.
0. A''o!nt$ent
a) S+,Ce%t to the te*$s and %ond!t!ons !n th!s A2*ee$ent AAIP he*e,y 2*ants to the 9!st*!,+to* the
so-e *!2ht d+*!n2 the %ont!n+an%e !n "o*%e o" th!s A2*ee$ent to '+*%hase "o* d!st*!,+t!on and *esa-e !n
the Te**!to*y those o" !ts P*od+%ts e6%-+s!e-y "o* A+to$ot!e and Ind+st*!a- A''-!%at!on Me6%-+d!n2
!nte*nat!ona- $a*!ne a''-!%at!on) s'e%!"!ed !n the ;!*st ,c*e+!le
,) Th!s a''o!nt$ent sha-- ta.e e""e%t on ....1@ .. and sha-- s+,s!st "o* a 'e*!od o" .. yea*s "*o$ that
date +n-ess othe*#!se te*$!nated !n a%%o*dan%e #!th the '*o!s!ons o" th!s A2*ee$ent and sha--
%ont!n+e the*ea"te* +nt!- te*$!nated ,y e!the* 'a*ty 2!!n2 to
the othe* at any t!$e s!6 M<) $onthsH not!%e !n #*!t!n2
%) P*o!ded a-#ays that the 9!st*!,+to* !s not !n ,*ea%h o" any o" !ts o,-!2at!ons and te*$s
#hatsoee* he*e+nde* AAIP #!-- not a''o!nt any othe* d!st*!,+to* "o* the P*od+%ts !n the Te**!to*y
d+*!n2 the te*$ o" th!s A2*ee$entm ho#ee* AAIP $ay d+*!n2 the 'e*!od o" s!6 M<) $onths '*!o* to
the te*$!nat!on he*eo" a''o!nt the 9!st*!,+to*Hs s+%%esso* M!" any) and a--o# AAIP and s+%h
s+%%esso* to $a.e !tse-" .no#n as AAIPHs "+t+*e d!st*!,+to* a''o!nted to do ,+s!ness a"te* the
te*$!nat!on o" th!s A2*ee$ent
4. 9!st*!,+to*Hs +nde*ta.!n2s
a) The 9!st*!,+to* sha-- d+*!n2 the %ont!n+an%e o" th!s A2*ee$ent '+*%hase a-- !ts *e>+!*e$ent o" the
P*od+%ts "*o$ AAIP and sha-- d!-!2ent-y and "a!th"+--y se*e AAIP as !ts d!st*!,+to* !n the Te**!to*y
and sha-- !$'*oe and '*o$ote the sa-e o" the P*od+%ts "o* A+to$ot!e and Ind+st*!a- a''-!%at!on
Me6%-+d!n2 !nte*nat!ona- $a*!ne a''-!%at!on) to %+sto$e*s th*o+2h the Te**!to*y and to ens+*e the
,est 'oss!,-e d!s'-ay o" the P*od+%ts !n
a-- $a*.et!n2 and sa-es o+t-ets
,) The 9!st*!,+to* sha-- ens+*e !n a-- eents that the $!n!$+$ o*de* "o* the P*od+%ts "o* de-!e*y to
the 9!st*!,+to* sha-- ,e that set o+t !n %-a+se < M) he*e!na"te* set o+t !n the ,econ+ ,c*e+!le he*eto
%) The 9!st*!,+to* sha-- ens+*e that to %on"o*$ #!th a-- -e2!s-at!on *+-es1 *e2+-at!ons and stat+to*y
*e>+!*e$ents *e-at!n2 to the !$'o*tat!on sto*a2e d!st*!,+t!on and sa-e o" the P*od+%ts !n the Te**!to*y
"*o$ t!$e to t!$e.
d) The 9!st*!,+to* sha-- not a-te* o* t*eat !n any #ay #hatsoee* the %ontent and Cons+$e* Pa%.a2es
o" the P*od+%ts and #!-- s+''-y P*od+%ts on-y !n Cons+$e* Pa%.a2es "o*$ and 2et +' !n #h!%h they
a*e s+''-!ed to the 9!st*!,+to* ,y AAIPm the 9!st*!,+to* sha-- '*o%+*e s!$!-a* +nde*ta.!n2 "*o$ a-- !ts
$a*.et!n2 and sa-es o+t-ets a%%o*d!n2-y and sha-- ,e *es'ons!,-e "o* and stand -!a,-e "o* the
%o$'-!an%e the*eo"
e) The 9!st*!,+to* sha-- $a!nta!n sa-es *e%o*ds !n .*es'e%t o" !n !ts o+t-ets and s+''-y ea%h $onth a
sa-es and sto%.s *et+*n and s+%h othe* "+*the* *e%o*ds and *e'o*ts a-- !n the En2-!sh Gan2+a2e as $ay
,e s'e%!"!ed ,y AAIP "*o$ t!$e to t!$e
") The 9!st*!,+to* sha-- ens+*e that !ts sa-es$en !s!t *e2+-a*-y the ,+s!ness '*e$!ses o" '*esent and
'otent!a- $a*.et!n2 and sa-es o+t-ets%+sto$e*s "o* the P*od+%ts !n the Te**!to*y and !n add!t!on to
!s!t atte$'t to o,ta!n o*de*s "o* the P*od+%ts "*o$ any 'e*sons to #ho$ they $ay ,e d!*e%ted ,y
AIP
2) The 9!st*!,+to* sha-- ,e *es'ons!,-e "o* ens+*!n2 that the P*od+%ts *ea%h the %ons+$e* !n the ,est
'oss!,-e %ond!t!on and sha-- ta.e a-- 'os!t!e '*e%a+t!ons to ao!d %onta$!nat!on o* a-te*at!on o" the
P*od+%ts and the Cons+$e* 'a%.a2es and sha-- ed+%ate and '*o%+*e s!$!-a* +nde*ta.!n2 "*o$ a-- !ts
sa-es$en and $a*.et!n2 and sa-es o+t-ets a%%o*d!n2-y and sha-- ,e *es'ons!,-e "o* and stand -!a,-e
"o* the %o$'-!an%e the*eo"
h) The 9!st*!,+to* sha-- '*o$'t-y *eso-e sat!s"a%to*!-y any %o$'-a!nts *e-at!n2 to the '*o$ot!on sa-e
o* '*o!s!on o" te%hn!%a- !n"o*$at!on and a-- othe* $atte*s #hatsoee* !n *es'e%t o" the P*od+%ts
a*!s!n2 #!th!n the Te**!to*ym the 9!st*!,+to* sha-- '*o$'t-y not!"y AAIP o" any %o$'-a!nts o* +n+s+a-
%o$$ents #hethe* "ao*a,-e o* +n"ao+*a,-e o* ,y #ay o" *e>+ests "o* !n"o*$at!on) !t $ay *e%e!e
'e*ta!n!n2 to the P*od+%ts o* o" any de"e%t!e P*od+%tsm !t !s +nde*stood that AAIP sha-- not ,e !n
any#ay *es'ons!,-e "o* o* -!a,-e to any %o$'-a!nts #hatsoee* and the 9!st*!,+to* he*e,y a2*ees to
"+--y !nde$n!"y AAIP a%%o*d!n2-y. The 9!st*!,+to* sha-- .ee' AAIP *e2+-a*-y and %ont!n+o+s-y
!n"o*$ed o" the '*o2*ess and dee-o'$ent o" the $a*.et !n the Te**!to*y "o* the P*od+%ts and "o* a--
2oods s!$!-a* the*eto o* %o$'et!t!e the*e#!th and o" a-- -a#s Hand *e2+-at!ons a""e%t!n2 the
!$'o*t d!st*!,+t!on -a,e--!n2 'a%.a2!n2 ade*t!s!n2 and sa-e o" the P*od+%ts and o" s+%h 2oods !n the
Te**!to*y and o" a-- $atte*s #hatsoee* a""e%t!n2 o* *e-eant to AA-PHs ,+s!ness !n the Te**!to*y.
C The 9!st*!,+to* sha-- not d!st*!,+te s!$!-a* '*od+%t !n the Te**!to*y o* ente* !nto any ,+s!ness
t*ansa%t!on !n %o$'et!t!on #!th AAIP
. The 9!st*!,+to* #!-- .ee' "+-- '*o'e* and +'7to7date *e%o*ds !n the En2-!sh Gan2+a2e sho#!n2
%-ea*-y a-- en>+!*!es1 t*ansa%t!ons and '*o%eed!n2s *e-at!n2 to the d!st*!,+to*sh!' and sha-- at a-- t!$es
'e*$!t AAIP o* !ts *e'*esentat!es "+-- a%%ess the*eto
-) The 9!st*!,+to* he*e,y a%.no#-ed2es that the A2*ee$ent !s 'e*sona- and sha-- not ass!2n o*
'+*'o*t to ass!2n the ,ene"!t o" th!s A2*ee$ent #!tho+t the '*!o* %onsent !n #*!t!n2 o" AAIP1 o" #h!%h
%onsent sha-- not ,e +n*easona,-y #!thhe-d #!tho+t '*eC+d!%e to the "o*e2o!n2m !t !s +nde*stood that
an a$a-2at!on o* *e%onst*+%t!on o* %han2e !n %ont*o- and %han2e !n o#ne*sh!' o" +' 0(n e>+!ty and
a,oe a*e dee$ed an ass!2n$ent "o* #h!%h AAIP '*!o* #*!tten %onsent $+st ,e '*o%+*ed
$) The 9!st*!,+to* sha-- !n se--!n2 the P*od+%ts be bo!n+ by (?IP.s con+itions o# sale as "*o$ t!$e
!n "o*%e and any $od!"!%at!on the*eto $ade ,y AAIP e!the* 2ene*a--y o* !n *es'e%t o" any
'a*t!%+-a* '+*%hase and !n se--!n2 sha-- %ont*a%t on -!.e te*$s to those %ond!t!ons as "*o$ t!$e to t!$e
!n "o*%e to2ethe* #!th any 2ene*a- o* 'a*t!%+-a* $od!"!%at!ons as *es'e%ts any 'a*t!%+-a* sa-e and sha--
not $a.e any '*o$!ses *e'*esentat!ons #a**ant!es o* 2+a*antees #!th *e"e*en%e to the P*od+%ts
e6%e't s+%h as a*e %ons!stent #!th those %ond!t!ons o* as one e6'*ess-y a+tho*!sed ,y AAIP !n #*!t!n2
n) The 9!st*!,+to* sha-- not d!*e%t-y o* th*o+2h any a2ent se-- any o" the P*od+%ts o!tsi+e t*e
Territory or .no#!n2-y o* ha!n2 *eason to ,e-!ee that they #o+-d ,e so *eso-d se-- the P*od+%ts to
any 'e*son o* ,ody %o*'o*ate o* !n%o*'o*ate #!th!n the Te**!to*y #!th a !e# to the!* *esa-e o+ts!de
the Te**!to*y
o) The 9!st*!,+to* sha-- not d!*e%t-y o* th*o+2h any a2ent se-- any o" the P*od+%ts "o* $a*!ne
a''-!%at!on o* .no#!n2-y o* ha!n2 *eason to ,e-!ee that they #o+-d ,e *eso-d1 se-- the P*od+%ts to
any 'e*son o* ,odH %o*'o*ate o* !n%o*'o*ate
') The 9!st*!,+to* a%.no#-ed2es that !t !s not %o$'etent to and #!-- not !n%+* any -!a,!-!ty on ,eha-"
o" AAIP o* !n any #ay '-ed2e o* '+*'o*t to '-ed2e AAIPHs %*ed!t o* a%%e't any o*de* o* $a.e any
%ont*a%t ,!nd!n2 +'on AAIP
>) The 9!st*!,+to* sha-- '*esent a d*a"t ann+a- $a*.et!n2 ade*t!s!n2 and '*o$ot!on '-an to AAIP "o*
%o$$ent and a''*oa- '*!o* to !ts !$'-e$entat!on. It !s +nde*stood that a''*oa- ,y AAIP does not
a$o+nt to an a%%e'tan%e o" -!a,!-!ty #hatsoee* o* ho#soee* the*e+nde* and the 9!st*!,+to*
+nde*ta.es to "+--y !nde$n!"y AAIP at a-- t!$es a%%o*d!n2-y
*) The 9!st*!,+to* +nde*ta.es that !ts $a*.et!n2 ade*t!s!n2 and '*o$ot!ona- a%t!!t!es !n *es'e%t o"
the P*od+%ts sha-- at a-- t!$es %o$'-y #!th the a''-!%a,-e -a# and the !nd+st*y standa*ds
s) 9!st*!,+to* sha-- %ond+%t !ts ,+s!ness !n a $anne* that #!-- *e"-e%t "ao*a,-y on AAIP and AAIP
A""!-!ates1 the P*od+%ts and the 2ood na$e and *e'+tat!on o" the "o*e2o!n2 and sha-- "oste* %ons+$e*
%on"!den%e !n the P*od+%ts. 9!st*!,+to* sha-- not en2a2e !n any de%e't!e o*. $!s-ead!n2 '*o$ot!on o*
ade*t!s!n2 o* !nd+-2e o* 'a*ta.e !n o* %ondone any +neth!%a- t*ade '*a%t!%es
t) The 9!st*!,+to* sha-- "+--y !nde$n!"y and .ee' AAIP "+--y !nde$n!"!ed and ha*$-ess at a-- t!$es
and "*o$ t!$e to t!$e and a2a!nst any and a-- -oss da$a2e %-a!$ 'ena-t!es #hatsoee* and
ho#soee* o* -!a,!-!ty o* e6'ense Mand !" so-!%!to*Hs "ees on a so-!%!to* and %-!entHs ,as!s to ,e ta6ed)
s+""e*ed o* !n%+**ed ,y AAIP *es+-t!n2 "*o$ a ,*ea%h o" any o" the te*$s he*e!n ,y the 9!st*!,+to* o*
othe*#!se #hatsoee* and ho#soee* !n *e-at!on to o* a*!s!n2 o+t o" th!s A2*ee$ent.
4. +rinipa#s 9n=ertakings
a) AAIP sha-- +se !ts ,est endeao+* to s+''-y the 9!st*!,+to* #!th the P*od+%ts o*de*ed ,y the
9!st*!,+to*
,) AAIP #a**ants to 9!st*!,+to* that the P*od+%ts #!-- %o$'-y #!th the 2!en %ha*a%te*!st!%s as
a$ended "*o$ t!$e to t!$e as %onte$'-ated he*e!n '*o!ded a-#ays any %-a!$ "o* ,*ea%h o" the
"o*e2o!n2 #a**anty $+st ,e s+,$!tted !n #*!t!n2 ,y 9!st*!,+to* to AAIP "it*in % M"!e) days a"te* the
date !n #h!%h s+%h %-a!$ !s $ade1 "a!-!n2 #h!%h s+%h %-a!$s sha-- not ,e %ons!de*ed o* a--o#edm !t !s
"+*the* '*o!ded that AAIPHs -!a,!-!ty !n *es'e%t o" any ,*ea%h o" the "o*e2o!n2 #a**anty sha-- ,e
-!$!ted !n a-- eents to t*e Distrib!tor.s p!rc*ase '*!%e o" the P*od+%ts !no-ed '-+s the %ost o"
t*ans'o*tat!on o" s+%h P*od+%ts a''*oed !n #*!t!n2 ,y AAIP '*!o* to the t!$e that s+%h %ost !s
!n%+**ed
%) S+,Ce%t to AAIP '*!o* #*!tten a''*oa- o" the $a*.et!n2 ade*t!s!n2 and '*o$ot!ona- '-an and the
,+d2et the*eo" and s+,Ce%t a-#ays to the st*!%t %o$'-!an%e the*eo" AAIP a2*ees to
*e!$,+*se the 9!st*!,+to* ha-" the a"o*esa!d ,+d2et s'ent o* a%t+a- s'end!n2 #h!%hee* !s the -esse*.
The a''*oa- ,y AAIP does not a$o+nt to an a%%e'tan%e o" -!a,!-!ty #hatsoee* o* ho#ee*
the*e+nde* and the 9!st*!,+to*7 +nde*ta.e to "+--y !nde$n!"y AA-P at a-- t!$es a%%o*d!n2-y
d) No #a**anty o* #a**ant!es e6'*essed o* !$'-!ed !n%-+d!n2 ,+t not -!$!ted to any !$'-!ed #a**anty
o" $e*%hanta,!-!ty o* "!tness "o* any '+*'oseF #hatsoee* a*e 2!en ,y AAIP !n *es'e%t o" the
P*od+%ts e6%e't!n2 on-y that #a**anty 2!en to 9!st*!,+to* '+*s+ant a,oe #h!%h !s s+,Ce%t to the
te*$s %ond!t!ons and -!$!tat!ons the*e!n set "o*th
n) AAIP #a**ants that !n"o*$at!on "+*n!shed ,y AAIP to 9!st*!,+to* "o* ade*t!s!n2 o* othe*
'*o$ot!ona- '+*'oses !n *es'e%t o" the '*od+%ts #!-- ,e as "a* as '*a%t!%a,-e a%%+*ate at the t!$e o"
'+,-!%at!on
'. 2gips reser&ations
AAIP *ese*es to !tse-" not#!thstand!n2 anyth!n2 to the %ont*a*y he*e!n %onta!ned the "o--o#!n2
*!2htsB
a) To de%-!ne o* to a%%e't any o*de* "o*$ the 9!st*!,+to* and ,y so de%-!n!n2 sha-- not !n%+* any
-!a,!-!ty #hatsoee* to the 9!st*!,+to* !" the 9!st*!,+to* !s !n ,*ea%h o" any one o" the te*$s
#hatsoee* o" th!s A2*ee$ent
,) W!tho+t '*eC+d!%e to the 2ene*a-!ty o" th!s A2*ee$ent and #!tho+t ass!2n!n2 any *eason the*e to
and #!tho+t '*!o* not!%e a*y the 5irst ,c*e+!le he*eto de"!n!n2 the P*od+%ts e!the* ,y #!thd*a#!n2
the*e"*o$ a %-ass o* %-asses o" P*od+%ts na$ed the*e!n o* ,y the add!t!on the*eto a"te* not!%e to the
9!st*!,+to* o" a "+*the* %-ass o* "+*the* %-asses o" '*od+%ts o" AAIP and as set to !n C-a+se 1Ma) a,oe
%) I" the 9!st*!,+to* !s not at any t!$e '*od+%!n2 ade>+ate sa-es %oe*a2e th*o+2ho+t the #ho-e o" the
Te**!to*y and the *e2!on the*eo" and #!tho+t '*eC+d!%e to any o" !ts *!2ht +nde* th!s A2*ee$ent AAIP
$ay e!the* e6%-+de "*o$ th!s A2*ee$ent s+%h 'a*t o* 'a*ts o" the Te**!to*y ando* e6%-+de "*o$ th!s
A2*ee$ent s+%h one o* $o*e o" the P*od+%ts he*e!n de"!ned o* to ta.e ,oth these %o+*ses o" a%t!on
sae that ne!the* s+%h %o+*se o" a%t!on sha-- ,e ta.en +nde* th!s %-a+se #!tho+t '*!o* not!%e to the
9!st*!,+to*
d) To ta.e s+%h ste' !tse-" as $ay see$ ne%essa*y o* e6'ed!ent M!n%-+d!n2 and #!tho+t '*eC+d!%e to
the 2ene*a-!ty o" the *ese*ed *!2ht to a''o!nt a *e'*esentat!e !n the Te**!to*y) to '*o$ote the Sa-e o"
the P*od+%ts !n the Te**!to*y and to not!"y the 9!st*!,+to* o" any 'e*sons1 "!*$s o* ,od!es %o*'o*ate
%a**y!n2 on ,+s!ness !n the Te**!to*y #ho a''ea* to !t to ,e !n a 'os!t!on to enhan%e the sa-e o" the
P*od+%ts
e) To ente* +'on $an+"a%t+*e o* $a*.et *esea*%h o* d!st*!,+t!on o" any '*od+%ts #hatsoee* #!tho+t
%ons+-t!n2 the 9!st*!,+to* o* *e$+ne*at!n2 the 9!st*!,+to* !n any #ay "o* any o" s+%h '*od+%ts $ay
,e so-d !n the Te**!to*y
") AAIP $ay se-- and s+''-y d!*e%t-y #!tho+t '*!o* %onsent o* a''*oa- o" the 9!st*!,+to* the
P*od+%ts to AAIP A""!-!ate and s+%h 'e*son o* %o$'an!es !n #h!%h EN1 o* %o$'an!es ,e-on2!n2 to
ENI o#n a sha*e o" not -ess than 4)n and to ta.e 'a*t !n in $overnment.s ten+ers #rom time to time
#or t*e s!pply an+ sale o# t*e Pro+!cts "it*o!t rem!neratin$ t*e Distrib!tor in any "ay
,. +ries, =e#i&er$ an= on=itions of sa#e
a) P*!%es >+oted to the 9!st*!,+to* "o* any o" the P*od+%ts a*e set o+t a2a!nst the P*od+%ts !n the 5irst
,c*e+!le he*eto and a*e s+,Ce%t to %han2e ,y AAIP at any t!$e '*!o* to 9!st*!,+to*Hs "!*$ o*de*
,) AAIP sha-- hae no -!a,!-!ty #hatsoee* "o* any de-ay !n de-!e*y o* 'e*"o*$an%e %a+sed ,y #a*1
!nd+st*!a- d!s'+tes1 "!*e1 "o*%e $aCe+*e o* any othe* %!*%+$stan%es #hatsoee* ,eyond !ts %ont*o-
%) W!tho+t '*eC+d!%e to any othe* *!2hts +nde* th!s A2*ee$ent AAIP sha-- ,e ent!t-ed to #!thho-d
"+*the* s+''-!es #!tho+t -!a,!-!ty #hatsoee* #h!-e 'ay$ent o" any s+$s d+e "*o$ the 9!st*!,+to*
*e$a!ns o+tstand!n2
d) 9!st*!,+to* sha-- s+,$!t !ts est!$ated *e>+!*e$ents "o* the P*od+%ts d+*!n2 s+%%ess!e "o+*
$onths3 'e*!ods to AAIP at -east t#o $onths '*!o* to the %o$$en%e$ent o" ea%h s+%h 'e*!od
e) ;o* sh!'$ents o" the P*od+%ts to 9!st*!,+to* +nde* th!s A2*ee$ent 9!st*!,+to* sha-- s+,$!t !ts "!*$
o*de*s #!th !**eo%a,-e con#irme+ Gette*s o" C*ed!t esta,-!shed and *e%e!ed and "+*the* a%%e'tan%e
,y AAIP as "o--o#s
7 not -ate* than the 1)
th
Mtenth) day o" the $onth '*e%ed!n2 the $onth !n #h!%h o*de* !s to ,e sh!''ed
"o* P*od+%ts to ,e s+''-!ed e67S!n2a'o*e '-ant
7 not -ess than <) Ms!6ty) days '*!o* to the des!*ed de-!e*y da-e "o* P*od+%ts to ,e s+''-!ed e67Ita-y
The te*$s o" the !**eo%a,-e %on"!*$ed Gette*s o" C*ed!t sha-- ,e '*es%*!,ed and a''*oed ,y AAIP
"*o$ t!$e to t!$e
") The "!*st Cont*a%t :ea* o" th!s A2*ee$ent sha-- %o$$en%eH on the e""e%t!e date he*eo" and
s+,se>+ent Cont*a%t :ea*s sha-- %o$$en%e on ann!e*sa*!es o" sa!d e""e%t!e datem d+*!n2 s+%%ess!e
Cont*a%t :ea*s 9!st*!,+to* sha-- '+*%hase "*o$ AAIP no -ess than the >+ant!ty o" the P*od+%ts set o+t
!n the ,econ+ ,c*e+!le
M!n!$+$ >+ant!t!es "o* s+,se>+ent *ene#a- te*$s sha-- ,e a2*eed +'on ,et#een the Pa*t!es he*eto
no -ess than < Ms!6) $onths '*!o* to the %o$$en%e$ent o" the *ene#a- te*$ !n >+est!on o* !" not so
a2*eed sha-- ,e the $!n!$+$ >+ant!ty "o* the !$$ed!ate-y '*e%ed!n2 Cont*a%t :ea* o* the a%t+a-
>+ant!ty so-d d+*!n2 s+%h yea* #h!%hee* !s the h!2he* to ,e !n%*eased ,y 1)n ee*y s+,se>+ent
*ene#a- yea* +' to 1@ ..
2) 9!st*!,+to* o*de*s "o* the '*od+%ts $ay s'e%!"y de-!e*y at one t!$e ,+t no *e>+ested de-!e*y
sha-- ,e "o* -ess than 1 MOne) Conta!ne* o" P*od+%ts
h) AAIP *ese*es "o* !tse-" and the AAIP A""!-!ates the *!2ht to d!s%ont!n+e the $an+"a%t+*e o* sa-e o"
any P*od+%ts o* to $a.e %han2es !n !ts %o$'os!t!on at any t!$e #!tho+t any -!a,!-!ty to 9!st*!,+to*
a'a*t "*o$ that o" not!"y!n2 9!st*!,+to*
!) 9e-!e*y o" the P*od+%ts sha-- ,e $ade #!th!n A8 +ays "*o$ the date o" the *e%e!'t and a%%e'tan%e
,y AAIP o" the !**eo%a,-e %on"!*$ed Gette* o" C*ed!t "o* P*od+%ts to ,e s+''-!ed e67Ita-y and #!th!n
=8 +ays "o* P*od+%ts to ,e s+''-!ed e67S!n2a'o*e
C) I" "o* any *easons #hatsoee* the 9!st*!,+to* sha-- "a!- to ne$lect to ta.e de-!e*y o" the P*od+%ts
#!th!n 1 day o" s%hed+-e date M!n%-+s!e) the AAI; sha-- ,e ent!t-ed to t*eat the o*de* as %an%e--ed and
!no!%e the 9!st*!,+to* "o* a-- %osts and e6'enses !n%+**ed o* d!s'ose o" the P*od+%ts #!th!n 18 days
the*ea"te* and !no!%e the 9!st*!,+to* "o* a-- %osts and e6'enses !n%+**ed ,y AAIP and any
d!$!n+t!on !n the sa-e '*!%e
6. +assing of RiskA-it#e
a) Un-ess othe*#!se a2*eed the *!s. to the P*od+%ts sha-- 'ass to the 9!st*!,+to* as soon as o* #hen
the P*od+%ts o* 'a*t the*eo" a*e dee$ed de-!e*ed o* *eady "o* de-!e*y to the 9!st*!,+to* ando* the
P*od+%ts o* 'a*t the*eo" a*e dee$ed to ,e !n the 9!st*!,+to*Hs
'ossess!on
,) Not#!thstand!n2 the a"o*esa!d and #!tho+t '*eC+d!%e the*eto the T!t-e to the P*od+%ts on-y 'ass to
the 9!st*!,+to* +'on "+-- 'ay$ent o" the '*!%e o" the P*od+%ts to AAIP
%) Unt!- "+-- 'ay$ent and '*!o* to the 9!st*!,+to*Hs sa-e o" the P*od+%ts the 9!st*!,+to* sha-- .ee'
ando* sto*e the P*od+%ts !n s+%h $anne* %ons!stent #!th AAIPHs o#ne*sh!' and $an!"ested to a--
th!*d 'a*t!es
8. +a$ment terms
a) The 9!st*!,+to* a2*ees to 'ay "o* a-- P*od+%ts o" AAIP o*de*ed ,y #ay o" !**eo%a,-e con#irme+
Gette*s o" C*ed!t th*o+2h a ,an. 'aya,-e at s!2ht to AAIP !n Un!ted States 9o--a*s 'aya,-e !n
S!n2a'o*e o* e-se#he*e as AAIP $ay dete*$!ne "*o$ t!$e to t!$e
,) A-- a$o+nts *e>+!*ed to ,e 'a!d ,y the 9!st*!,+to* sha-- ,e 'a!d #!tho+t ded+%t!on o* a,ate$ent
#hatsoee*
9. 1toks
The 9!st*!,+to* sha-- at a-- t!$es d+*!n2 the %ont!n+an%e o" th!s A2*ee$ent %a**y sto%.s o" no -ess
than one $onthHs s+''-y o" the P*od+%ts and ens+*e that a-- o*de*s *e%e!ed ,y the 9!st*!,+to*Hs
$a*.et!n2 and sa-es o+t-ets a*e s+''-!ed #!tho+t d+e de-aym the 9!st*!,+to* sha-- ta.e a-- *easona,-e
ste's to ens+*e that the sto%.s a*e '*o'e*-y sto*ed at a-- t!$es and that a %ont!n+o+s sto%. *otat!on
'o-!%y !s $a!nta!ned "o* a-- sto%.s !n a-- #a*eho+ses to ens+*e the >+a-!ty o" the P*od+%ts !s '*ese*ed
1@. -ra=emarks an= patents
a) It !s a2*eed that a-- *!2hts !n the t*ade $a*.s a''ea*!n2 +'on o* +sed !n *e-at!on to the P*od+%ts and
o" the 2ood#!-- atta%h!n2 the*eto a*e and sha-- *e$a!n the e6%-+s!e '*o'e*ty o" AAIP o* !ts
asso%!ated %o$'an!esm the 9!st*!,+to* sha-- on-y +se the sa!d t*ade $a*.s !n %onC+n%t!on #!th the
P*od+%ts and !n a%%o*dan%e #!th the '*o!s!ons o" th!s A2*ee$entm the sa!d t*ade$a*.s sha-- not ,e
+sed !n any $anne* -!a,-e to !na-!date the *e2!st*at!on o* -essen the a-+e the*eo"m the *!2ht to +se the
sa!d t*ade $a*.s !n %onne%t!on #!th the P*od+%ts !s on-y 2*anted to the e6tent that.
AAIP !s a,-e to do so #!tho+t endan2e*!n2 the a-!d!ty o" the *e2!st*at!on o* -essen!n2 the a-+e. The
9!st*!,+to* sha-- !$$ed!ate-y !n"o*$ AAIP o" any and ee*y !$'*o'e* o* #*on2"+- +se o* any a%t+a-
o* 'otent!a- !n"*!n2e$ent !n the Te**!to*y o" AAIPHs 'atents t*ade$a*.s1 des!2ns1 $ode-s1 o* s!$!-a*
!nd+st*!a- o* %o$$e*%!a- $ono'o-y *!2hts #h!%h %o$e to the 9!st*!,+to*Hs not!%e and sha-- '*o!de
"+-- %o7o'e*at!on to AAIP at a-- t!$es
,) The 9!st*!,+to* sha-- not do o* o$!t to do anyth!n2 ,y #h!%h the 2ood#!-- and *e'+tat!on
asso%!ated #!th the t*ade $a*.s $!2ht o* d!$!n!shed o* Ceo'a*d!sed and sha-- !n%-+de !n1 a-- '*!nted
$atte* on #h!%h any o" the t*ade $a*.s o" AAIP Mo* one o" !ts asso%!ated %o$'an!es as the %ase $ay
,e) the "o*$ the*eo" to ,e dete*$!ned ,y AAIP
%) 9!st*!,+to* !s a+tho*!sed to +se AAIPHs *e2!ste*ed na$es -o2os and t*ade$a*.s *e-ated to the
P*od+%ts d+*!n2 the e6!sten%e o" and !n the %o+*se o" o'e*at!n2 +nde* th!s A2*ee$entm ,+t noth!n2
%onta!ned he*e!n sha-- ,e %onst*+ed as 2*ant!n2 o* sha-- 2*ant to 9!st*!,+to* any *!2hts1 t!t-e o* !nte*est
!n the a,oe sa!d na$es and t*ade$a*.s o* othe* !nd+st*!a- '*o'e*ty *!2ht o#ned o* ,e!n2 +sed ,y
AAIP o* any AAIP A""!-!ate. 9!st*!,+to* sha-- ta.e no ste's to *e2!ste* any AAIP o* AAIP A""!-!ate
t*ade$a*.1 t*ade na$e ,*and o* -o2o o* any othe* #o*dMs) o* sy$,o-Ms) dee$ed de%e't!e-y s!$!-a*
the*eto ,y AAIP. 9!st*!,+to* sha-- hae no *!2ht to +se any s+%h #o*dMs) o* sy$,o-Ms) as o* as 'a*t o"
!ts %o*'o*ate o* t*ade na$e
d) U'on e6'!*at!on o" th!s A2*ee$ent 9!st*!,+to* sha-- "o*#!th %ease a-- +se o" AAIPHs o* any AAIP
A""!-!ateHs !nd+st*!a- '*o'e*ty *!2hts and sha-- not the*ea"te* +se any s+%h *!2ht o* any t*ade$a*. na$e
,*and o* -o2o dee$ed de%e't!e-y s!$!-a* the*eto ,y AAIP e6%e't !n %onne%t!on #!th the sa-e o" s+%h
>+ant!t!es o" the P*od+%ts as 9!st*!,+to* $ay hae !n sto%. at the t!$e o" e6'!*at!on o* te*$!nat!on
11. Confi=entia#it$
a) The 9!st*!,+to* sha-- not at any t!$e d+*!n2 o* a"te* the te*$ d!+-2e o* a--o# to d!+-2e to any
'e*sons any %on"!dent!a- !n"o*$at!on *e-at!n2 to th!s d!st*!,+to*sh!' o* to AAIP
,) Any te%hn!%a- %o$$e*%!a- and %on"!dent!a- !n"o*$at!on 2!en !n o*de* to ass!st the 9!st*!,+to* to
%a**y o+t !ts o,-!2at!ons !n th!s A2*ee$ent !s on-y to ,e +sed "o* the sa!d '+*'oses on-y
%) The 9!st*!,+to* sha-- ens+*e that !ts e$'-oyees and dea-e*s and $a*.et!n2 and sa-es o+t-ets a*e
a#a*e o" and o,se*e the '*o!s!ons o" th!s %-a+se ,oth d+*!n2 the s+,s!sten%e o" th!s A2*ee$ent and
the*ea"te*
d) A-- #*!tten $ate*!a- e$,ody!n2 !n"o*$at!on des!2nated ,y AAIP as %on"!dent!a- and a-- %o'!es
the*eo" a*e to ,e *et+*ned to AAIP on the te*$!nat!on o" th!s A2*ee$ent
e) The 9!st*!,+to* a%.no#-ed2es that a-- !n"o*$at!on %on%e*n!n2 the P*od+%ts !dent!"!ed ,y AAIP o*
any AAIP A""!-!ate as t*ade se%*et #h!%h 9!st*!,+to* has o,ta!ned o* sha-- o,ta!n !n %onse>+en%e o"
th!s A2*ee$ent #hethe* "*o$ AAIP and AAIP A""!-!ate o* othe*#!se a*e so-e-y "o* the '+*'oses o"
t!--s A2*ee$entm d!st*!,+to* +nde*ta.es to +se the sa$e de2*ee o" %a*e as !n '*ese*!n2 the se%*e%y o"
!ts o#n se%*et ,+s!ness !n"o*$at!on and sha-- '*o%+*e s!$!-a* +nde*ta.!n2 "*o$ !ts o#n e$'-oyees
and dea-e*s and $a*.et!n2 and sa-es o+t-ets a%%o*d!n2-y and 9!st*!,+to* sha-- ,e *es'ons!,-e "o* and
stand -!a,-e "o* the %o$'-!an%e the*eo". The o,-!2at!ons o" th!s Se%t!on sha-- not a''-y ho#ee* to
!n"o*$at!on #h!%hB
!) '*!o* to the t*ans$!tta- the*eo" toH9!st*!,+to* #as o" 2ene*a- '+,-!% .no#-ed2em o*
!!) ,e%o$es s+,se>+ent to the t!$e o" t*ans$!tta- to 9!st*!,+to* a $atte* o" 2ene*a- '+,-!% .no#-ed2e
othe*#!se than as a %onse>+en%e o" a ,*ea%h ,y 9!st*!,+to* o" !ts o,-!2at!on +nde* th!s Se%t!onm o*
!!!) !s $ade '+,-!% ,y AAIPm o*
!) #as !n the 'ossess!on o" 9!st*!,+to* !n do%+$enta*y "o*$ '*!o* to the t!$e o" 9!s%-os+*e the*eo"
to 9!st*!,+to* ,y AAIP and #as not a%>+!*ed d!*e%t-y o* !nd!*e%t-y "*o AAIP and !s he-d ,y
9!st*!,+to* "*ee o" any o,-!2at!on o" %on"!den%e to AAIP o* any th!*d 'a*tym o*
) !s *e%e!ed !n 2ood "a!th "*o$ a th!*d 'a*ty to d!s%-ose !t #ho to the ,est o" 9!st*!,+to*Hs
.no#-ed2e d!d not o,ta!n the sa$e "*o$ AAIP and #ho !$'oses no o,-!2at!on o" se%*e%y on
9!st*!,+to* #!th *es'e%t to s+%h !n"o*$at!on
1%. In=epen=ene of t.e parties
It !s a2*eed ,y the 'a*t!es he*eto that the 9!st*!,+to* !s o'e*at!n2 and #!-- %ont!n+e to o'e*ate "o* !ts
o#n a%%o+nt and noth!n2 !n th!s A2*ee$ent !s !ntended o* sha-- ,e %onst*+%ted to a+tho*!se the
9!st*!,+to* #!tho+t the '*!o* #*!tten a''*oa- o" AAIP to %*eate o* ass+$e any -!a,!-!ty o*
!nde,tedness o" any .!nd !n the na$e o" o* on ,eha-" o" AAIP o* to 2!e any #a**anty o" $a.e any
*e'*esentat!on !n the na$e o" o* on ,eha-" o" AAIP and th!s A2*ee$ent sha-- not ,e %onst*+ed as
%onst!t+t!n2 the 9!st*!,+to* as a2ents o" AAIP "o* any '+*'ose #hatsoee* o* to %onst!t+te a
'a*tne*sh!' ,et#een the 'a*t!es he*eto
1*. (ore male9re
a) In the eent that AAIP sha-- ,e +na,-e to %ont!n+e the %o$$e*%!a- '*od+%t!on o" the P*od+%ts ,y
*eason o" %a+ses ,eyond !ts %ont*o- !n%-+d!n2 ,y #ay o" !--+st*at!on M,+t s'e%!"!%a--y not -!$!ted to
"!*e1 "-ood1 e6'-os!on1 a%t!on o" e-e$ents1 a%ts o" Aod1 a%%!dents1 e'!de$!%s1 st*!.es1 -o%.o+ts o* othe*
-a,o+* t*o+,-es o* Hsho*ta2es1 !na,!-!ty to o,ta!n o* sho*ta2e o" $ate*!a-1 e>+!'$ent o* t*ans'o*tat!on1
!ns+**e%t!ons *!ots1 o* %!!- %o$$ot!on1 #a*1 ene$y a%t!on1 a%ts1 de$ands o* *e>+!*e$ents o" any
2oe*n$ent o* ,y othe* %a+ses #h!%h !t %o+-d not *easona,-y ,e e6'e%ted to ao!d then !t sha-- not ,e
*es'ons!,-e "o* any -oss #hatsoee* to the 9!st*!,+to* ho#soee* a*!s!n2. The*ea"te* AAIP sha-- +se
!ts ,est endeao+*s to *es+$e the %o$$e*%!a- '*od+%t!on o" t-!e P*od+%ts
,) In %ase o" the e6tens!on o" the %!*%+$stan%es o" "o*%e $nCe+*e th*o+2ho+t a '*o-on2ed 'e*!od o"
t!$e #he*e,y the 'e*"o*$an%e o" the *es'e%t!e o,-!2at!on %o+-d not ,e %a**!ed o+t th!s A2*ee$ent
sha-- ,e te*$!nated at the *e>+estK o" e!the* 'a*ty andHH th!s A2*ee$ent sha-- ,e t*eated as "*+st*ated
#he*e+'onB
!) #!tho+t de$and a-- $oney d+e to AAIP sha-- ,e 'a!d !$$ed!ate-y #!tho+t ded+%t!onm and
!!) the 9!st*!,+to* sha-- %ease to d!st*!,+te the P*od+%ts o" AAIP !$$ed!ate-y
14. -ermination
Th!s A2*ee$ent sha-- te*$!nate
a) on e6'!*y datem o*
,) !"B
!) any en%+$,*an%e sha-- ta.e 'ossess!on o" any o" the '*o'e*ty o" e!the* 'a*tym o*
!!) e!the* 'a*ty sha-- ,e%o$e !nso-entm o*
!!!) the 9!st*!,+to* sha-- ,e%o$e ,an.*+'t o* to 2o !nto -!>+!dat!on e!the* o-+nta*y o* %o$'+-so*y
+n-ess as 'a*t o" a ,ona "!de s%he$e o" *e%onst*+%t!on o* a$a-2a$at!on a''*oed ,y AAIP o* to ,e
d!sso-ed %o$'o+nd #!th !ts %*ed!to*s o* hae a *e%e!e* a''o!nted !n *es'e%t o" the #ho-e o* any
'a*t o" !ts assetsm o*
!) a *e%e!e* !s a''o!nted !n *es'e%t o" one #ho-e o* any o" the assets o* +nde*ta.!n2 o* othe*
'*o%ess sha-- ,e !ss+ed a2a!nst any '*o'e*ty o" the 9!st*!,+to*m o*
) the 9!st*!,+to* sha-- %ease o* th*eaten to %ease to %a**y on the #ho-e o* any s+,stant!a- 'a*t o" !ts
,+s!ness othe* than !n the %o+*se o" *e%onst*+%t!on o* a$a-2a$at!on a''*oed ,y AAIP he*etom o*
!) I" the 9!st*!,+to* %o$$!ts o* a--o#s to ,e %o$$!tted a ,*ea%h1 o" any o" !ts o,-!2at!ons he*e!n
stated and does not *e$edy s+%h ,*ea%h #!th!n "o+*teen M18) days a"te* #*!tten not!%e has ,een 2!en
to !t ,y AAIPm o*
!!) I" the 9!st*!,+to* %o$$!ts o* !s %ha*2ed #!th the %o$$!ss!on o" a %*!$!na- o* +n-a#"+- a%t o* ,y
%o$$!ss!on has %o$$!tted o* %ha*2ed #!th a %*!$!na- o* +n-a#"+- a%tm o*
!!!) I" the 9!st*!,+to* en2a2es !n any %ond+%t '*eC+d!%!a- to AAIP o* AAIPHs A""!-!ates 2ene*a--y o*
the $a*.et!n2 o" the P*od+%t 2ene*a--y.
Then !n any s+%h eent AAIP $ay ,e #*!tten a not!%e "o*th#!th te*$!nate th!s A2*ee$ent ,+t #!tho+t
'*eC+d!%e to any othe* *!2hts o" the 'a*t!es he*eto.
1'. Effets of termination
I" th!s A2*ee$ent te*$!nates "o* any *eason #hatsoee* and #!tho+t '*eC+d!%e to any othe* *!2htsB
a) W!tho+t de$and a-- $oney d+e to AAIP sha-- ,e 'a!d !$$ed!ate-y #!tho+t ded+%t!on
,) The 9!st*!,+to* sha-- %ease to d!st*!,+te the P*od+%ts o" AAIP !$$ed!ate-y
%) AAIP sha-- hae the d!s%*et!on and o't!on to *e2a*d any +ne6e%+ted o*de*s '-a%ed ,y the
9!st*!,+to* and a%%e'ted ,y AAIP ,e"o*e s+%h te*$!nat!on as %an%e--ed e6%e'ted those !n *es'e%t o"
#h!%h the 9!st*!,+to* sha-- hae "+*n!shed do%+$enta*y e!den%e to the sat!s"a%t!on o" AAIP #!th!n
th!*ty M4)) days "*o$ the not!%e o" the P*od+%ts o*de*ed to th!*d 'a*t!es '*!o* to the te*$!nat!on o" th!s
A2*ee$ent
d) The 9!st*!,+to* sha-- !" *e>+ested ,y AAIP "o*th#!th *et+*n to AAIP o* e-se#he*e as AAIP $ay
d!*e%t at the e6'ense o" AAIP a-- 2oods o* P*od+%ts ,e-on2!n2 to AAIP !n !ts 'ossess!on o* +nde* !ts
%ont*o- and a-- ade*t!s!n2 and '*o$ot!ona- $atte*s *e-at!n2 to the P*od+%ts !n !ts %ont*o-. In %ase o"
de"a+-t AAIP sha-- ,e ent!t-ed #!tho+t not!%e to ente* at any t!$e +'on the '*e$!ses #he*e the sa!d
2oods o* P*od+%ts $ay ,e "o* the t!$e ,e!n2 and to *e$oe the sa$e
%) A-- P*od+%ts *e$a!n!n2 +nso-d #h!%h !n the $+t+a- o'!n!on o" AAIP and 9!st*!,+to* a*e not !n
2ood %ond!t!on sha-- ,e "o*th#!th d!s'osed o" ,y the 9!st*!,+to* as d!*e%ted ,y AAIP
") The 9!st*!,+to* sha-- *et+*n to AAIP a-- sa$'-es and '+,-!%!ty '*o$ot!ona- and ade*t!s!n2
$ate*!a- and te%hn!%a- $ate*!a- and %o'y the*eo" +sed !n the d!st*!,+to*sh!'
2) The 9!st*!,+to* sha-- *et+*n to AAIP a-- o*!2!na-s and %o'!es o" a-- do%+$ents and !n"o*$at!on !n
any "o*$ %onta!n!n2 o* %oe*!n2 !n any #ay 'a*t o" the Inte--e%t+a- P*o'e*ty and te%hn!%a-
s'e%!"!%at!ons and -!te*at+*e
h) In the eent o" te*$!nat!on o" th!s A2*ee$ent AAIP sha-- hae the o't!on to *e'+*%hase "*o$
9!st*!,+to* any o* a-- o" the P*od+%ts '+*%hased "*o$ AAIP and o#ned ,y 9!st*!,+to* on the date
9!st*!,+to* *e%e!es #*!tten not!%e o" AAIPHs !ntent!on to e6e*%!se the *e'+*%hase sha-- ,e the !no!%e
'*!%e the*eo" a%t+a--y 'a!d ,y 9!st*!,+to* '-+s e*!"!ed t*ans'o*t %ost 'a!d ,y 9!st*!,+to*m !n the eent
o" the e6e*%!se o" th!s *e'+*%hase o't!on ,y AAIP 9!st*!,+to* sha-- '*o$'t-y de-!e* the P*od+%ts to
AAIP !n %on"o*$!ty #!th a-- -a#s and *e>+!*e$ents #h!%h $ay ,e ne%essa*y o* '*o'e* to t*ans"e*
2ood t!t-e to s+%h P*od+%ts to AAIP "*ee and
%-ea* o" any %ha*2e -!en o* en%+$,*an%em AAIP sha-- 'ay 9!st*!,+to* "o* s+%h '*od+%t '*o$'t-y a"te*
9!st*!,+to* has %o$'-!ed #!th a-- o" !ts o,-!2at!ons he*e+nde*
!) 9!st*!,+to* *e%o2n!Ees and a2*ees that !t !s "+--y %o$'ensated "o* !ts a%t!!t!es !n dee-o'!n2 the
$a*.et "o*. the P*od+%ts !n '*o$ot!n2 the na$e and *e'+tat!on o" the P*od+%ts and !n ,+!-d!n2
2ood#!-- !n *es'e%t o" the P*od+%ts ,y #ay o" *een+es de*!ed "*o$ *e7sa-es o" the P*od+%ts d+*!n2
the %+**en%y o" th!s A2*ee$entm %onse>+ent-y !n no eent sha-- te*$!nat!on o" t!ns A2*ee$ent "o* any
*easons #hatsoee* and ho#soee*. A!e *!se to any *!2ht o"
a%t!on ,y 9!st*!,+to* to *e%oe* add!t!ona- %o$'ensat!on o" -oss o* da$a2e "*o$ AAIP
1,. Non-Competition
9+*!n2 the te*$ o" th!s A2*ee$ent the 9!st*!,+to* sha-- not d!st*!,+te $an+"a%t+*e dee-o' o* o%%+'y
!tse-" !n any othe* #ay d!*e%t-y o* !nd!*e%t-y #!th 2oods o" a nat+*e %o$'et!t!e #!th the P*od+%ts !n7
o* o+ts!de the Te**!to*y #!tho+t '*!o* #*!tten %onsent "*o$ AAIP
16. 2ppointment of s9"-=istri"9tors
a) The 9!st*!,+to* sha-- hae the *!2ht to a''o!nt S+,79!st*!,+to*s and o+t-ets to sto*e and d!st*!,+te
the sa-es o" the P*od+%ts #!th!n the Te**!to*y on ,eha-" o" 9!st*!,+to*
,) The 9!st*!,+to* sha-- a-so ens+*e that a-- S+,79!st*!,+to*s and o+t-ets sha-- at a-- t!$es o,se*e and
%o$'-y #!th the te*$s and %ond!t!ons as stated !n th!s A2*ee$ent #h!%h a*e a''-!%a,-e to the$se-es
as d!st*!,+to*s and the 9!st*!,+to* sha-- ,e *es'ons!,-e and stand -!a,-e "o* the %o$'-!an%e the*eo"
18. Non-:ai&er
It !s +nde*stood and a2*eed that the "a!-+*e o" de-ay on the 'a*ty o" AAIP to *e>+!*e 'e*"o*$an%e o*
%o$'-!an%e o" the 9!st*!,+to* o" any '*o!s!ons o" th!s A2*ee$ent sha-- not a""e%t AAIPHs *!2ht to
*e>+!*e 'e*"o*$an%e o* %o$'-!an%e has ,een #a!ed !n #*!t!n2
19. 2ssignment
Th!s A2*ee$ent sha-- ,e ,!nd!n2 on the s+%%esso*s and ass!2ns o" ea%h o" the..'a*t!es he*etom
'*o!ded ho#ee* that th!s A2*ee$ent sha-- not ,e ass!2ned1 t*ans"e**ed o* so-d !n #ho-e o* !n 'a*t ,y
9!st*!,+to* +n-ess the te*$s and %ond!t!ons o" s+%h ass!2n$ent
t*ans"e* o* sa-e a*e a''*oed !n #*!t!n2 ,y AAIP
%@. 1a&ings of terms
a) Not#!thstand!n2 te*$!nat!on he*e!n the te*$s %ond!t!ons #a**ant!es +nde*ta.!n2s and !nde$n!t!es
%onta!ned o* *e"e**ed to he*e!n sha-- %ont!n+e to s+,s!st and ,!nd the 'a*t!es and ea%h !nd!!d+a-
the*eo" !nso"a* as sa$e o* any 'a*t the*eo" *e$a!n +n"+-"!--ed o* to ,e 'e*"o*$ed o* o+tstand!n2 o*
"o* the '+*'ose o" 2!!n2 e""e%t to ea%h and ee*y one o" the$
,) The see*a- +nde*ta.!n2s o" the 'a*t!es sha-- s+*!e and sha-- ,e t*eated as !n "+-- "o*%e and e""e%t
not#!thstand!n2 any %han2e !n sha*eho-d!n2 and d!*e%to*sh!' o* the %onst!t+t!on o" AAIP
%) I" anyone o* $o*e o" the '*o!s!ons %onta!ned he*e!n o* any do%+$ents o* *e%o*ds e6e%+ted !n
%onne%t!on he*e#!th sha-- ,e !na-!d !--e2a- o* +nen"o*%ea,-e !n any *es'e%t +nde* any a''-!%a,-e -a#1
the a-!d!ty -e2a-!ty and en"o*%ea,!-!ty o" the *e$a!n!n2 '*o!s!ons o* 'a*t the*eo" %onta!ned he*e!n
sha-- not !n any #ay ,e a""e%ted o* !$'a!*ed
%1. 2r"itration
A-- d!s'+tes a*!s!n2 !n %onne%t!on #!th the '*esent a2*ee$ent sha-- ,e "!na--y sett-ed7 +nde* the
'*o!s!ons o" the S!n2a'o*e A*,!t*at!on A%t and any $od!"!%at!ons the*eo" "*o$ t!$e to t!$e.
A*,!t*at!on '*o%eed!n2s sha-- ta.e '-a%e !n S!n2a'o*em S!n2a'o*e -a# sha-- ,e a''-!%a,-e
%%. Entire 2greement
a) Th!s A2*ee$ent e$,od!es the ent!*e +nde*stand!n2 o" the 'a*t!es and oe**!des and s+'e*%edes any
'*!o* '*o$!ses *e'*esentat!ons +nde*stand!n2s o* !$'-!%at!ons
,) Any a$end$ent he*eto $+st ,e !n #*!t!n2 and s!2ned ,y the d+-y a+tho*!sed *e'*esentat!es o"
AAIP and 9!st*!,+to*. No a$end$ent to th!s A2*ee$ent sha-- ,e e""e%ted ,y the a%.no#-ed2e$ent
o* a%%e'tan%e ,y AAIP o" '+*%hase o*de*s1 !no!%es1 sh!''!n2 !nst*+%t!on "o*$s o*1 othe*s s!$!-a*
do%+$ents #h!%h %onta!n te*$s o* %ond!t!on at a*!an%e #!th o* !n add!t!on to those set "o*th he*e!n
+n-ess s+%h a%.no#-ed2e$ent o* a%%e'tan%e s'e%!"!%a--y states that !t !s !ntended to a$end th!s
A2*ee$ent
%*. Interpretation
a) Any *e"e*en%e to any o" the 'a*t!es he*e!n !n%-+de the!* ass!2nees ando* s+%%esso*s7!n7t!t-e ando*
'e*sona- *e'*esentat!es
,) Wo*ds !$'o*t!n2 the s!n2+-a* tense !n%-+de the '-+*a- tenseH and !%e7e*sa
%) Wo*ds !$'o*t!n2 the $as%+-!ne 2ende* !n%-+de the "e$!n!ne 2ende* and ne+te* 2ende* and !%e7
e*sa
d) Pe*sonMs) !n%-+des a Co*'o*at!on and !%e7e*sa
e) The C-a+se head!n2s !n th!s A2*ee$ent a*e "o* ease o" *e"e*en%e on-y and #!-- not a""e%t the
!nte*'*etat!on he*eo"
%4. Noties
Any not!%es *e>+!*ed to ,e se*ed he*e+nde* sha-- ,e s+""!%!ent-y 2!en !" "o*#a*ded ,y *e2!ste*ed
'ost *e%o*ded de-!e*y %a,-e te-e6 o* te-e2*a'h to the add*ess set o+t at the head o" th!s A2*ee$ent o*
s+%h othe* add*ess as $ay hae ,een not!"!ed !n #*!t!n2 to the othe* 'a*ty "o* s+%h '+*'oses
%'. Exe9tion
Th!s A2*ee$ent $ay ,e e6e%+ted !n any n+$,e* o" %o+nte*'a*ts1 any s!n2-e %o+nte*'a*t o* a set o"
%o+nte*'a*ts e6e%+ted !n e!the* %ase ,y a-- the 'a*t!es he*eto sha-- %onst!t+te "+-- and o*!2!na-
a2*ee$ent "o* a-- '+*'oses
IN WRITNESS WHEREO; the 'a*t!es he*eto hae %a+sed th!s A2*ee$ent to ,e e6e%+ted !n
%o+nte*'a*t o*!2!na- ,y the!* d+-y a+tho*!sed *e'*esentat!es on the day and yea* "!*st set "o*th a,oe
SIANE9 ,y SIANE9 ,y
On ,eha-" o" On ,eha-" o"
AAIP ;ETROGI SPA 9ISTRIBUTOR
((age 1"3) (.( :ARRANT8 AND GUARANTEE
THE PROBGEM
A*e a #a**anty and a 2+a*antee the sa$e th!n2& Why do so$e %ont*a%ts *e'-a%e a #a**anty #!th
a de"e%ts -!a,!-!ty '*o!s!on?&
THE PRINCIPGE
A 2+a*antee !s a '*o$!se a,o+t so$e,ody e-se3s 'e*"o*$an%em a #a**anty !s a '*o$!se a,o+t yo+*
o#n. When ,+s!ness$en s'ea. o" the 5se--e*3s 2+a*antee? o* 5#a**anty? they $ean the
e6'o*te*3s -!a,!-!ty "o* de"e%tsm to ao!d %on"+s!on1 $any d*a"te*s today +se the te*$ 59e"e%ts
G!a,!-!ty P*o!s!on.?
IN MORE 9EPTH
A #a**anty !s a '*o$!se yo+ $a.e a,o+t yo+* o#n 'e*"o*$an%e. The #o*d !s +sed !n $any
%onte6ts. A #a**anty o" t!t-e1 "o* e6a$'-e1 !s a '*o$!se to a ,+ye* that the e6'o*te* *ea--y o#ns
the %ont*a%t 2oods. A '*od+%t #a**anty !s a '*o$!se ,y the e6'o*te* to %+*e de"e%ts !n h!s
'*od+%ts.
The*e a*e t#o 'a*t!es to a #a**antyB ,+ye* and se--e*. A 2+a*antee1 on the othe* hand1 !no-es
th*ee 'a*t!es1 as the d!a2*a$ sho#s. The 2+a*anto* $a.es a '*o$!se to one 'a*ty at the *e>+est o"
anothe*. The*e !s a $aCo* %on"+s!on o" te*$!no-o2y. Blac4<s La" Dictionary %o$$entsB
Inte*nat!ona--y1 the d!st!n%t!on ,et#een #a**anty and 2+a*antee !s o"ten ,-+**ed. ;!*st1
,+s!ness$en -oose-y +se the #o*ds as tho+2h they $ean the sa$e th!n2. Anothe* %o$$on ,e-!e"
!s that a #a**anty %oe*s $ate*!a-s and #o*.$ansh!'1 #h!-e 2+a*antee %oe*s s'e%!"!%at!ons. Th!s
!s not t*+e. 9oes !t $atte*& In "a%t1 yes. Con"+s!on ,et#een #a**anty and 2+a*antee %an ,e
dan2e*o+s. When&
Get3s say a %ont*a%t !s #*!tten !n En2-!sh1 ,+t Ae*$an -a# a''-!es. Ae*$an -a# $a.es a %-ea*
d!st!n%t!on ,et#een a 5se--e*3s #a**anty? and a 5se--e*3s 2+a*antee? the se--e*3s o,-!2at!ons a*e
$o*e e6tens!e +nde* a 52+a*antee.? So -oose En2-!sh #!-- 2et the e6'o*te* !nto t*o+,-e !"
Ae*$an -a#1 o* any %-ose-y *e-ated -a# a''-!es to the %ont*a%t.
As a 2ene*a- *+-e1 !n%o**e%t +se o" 52+a*antee? %a+ses t*o+,-em +se the #o*d on-y !" yo+ $ean a
th!*d 'a*ty 2+a*antee.
'.10=7188
When ,+s!ness$en s'ea. o" the 5se--e*3s 2+a*antee? o* 5#a**anty? they $ean the e6'o*te*3s
-!a,!-!ty "o* de"e%tsm to ao!d %on"+s!on1 $any d*a"te*s today +se the te*$ De#ects Liability
Provision.
A de"e%ts -!a,!-!ty '*o!s!on Mo* #a**anty) %oe*s de"e%ts that a*e '*esent at the $o$ent o"
de-!e*y. No*$a--y >+a-!ty %ont*o- '*eents '*od+%ts #!th o,!o+s de"e%ts "*o$ -ea!n2 the
"a%to*ym !n the ne6t ste'1 '*od+%ts #!th o,!o+s o* 5'atent? de"e%ts a*e !dent!"!ed d+*!n2 o'en
'a%.a2e !ns'e%t!on and *eCe%ted. The de"e%ts that 2!e *!se to the $ost se*!o+s '*o,-e$s ,et#een
e6'o*te* and ,+ye* a*e h!dden o* -atent de"e%ts.
9e"e%ts $ay ,e Ma) !n #o*.$ansh!'1 M,) !n $ate*!a-s1 o* M%) !n des!2n. Ho#ee*1 #air "ear an+
tear and mis!se by t*e b!yer a*e not %oe*ed ,y the '*o!s!on.
The de"e%ts -!a,!-!ty 'e*!od !s the 'e*!od d+*!n2 #h!%h the e6'o*te* !s -!a,-e "o*7 and $+st $a.e
2ood7 de"e%ts that a*e a''a*ent on de-!e*y o* that %o$e to -!2ht -ate*. The ,+ye*1 o" %o+*se1 $+st
'*oe that the de"e%t #as '*esent !n the 2oods at the date o" de-!e*y7 o"ten a d!""!%+-t tas.. It !s
!$'o*tant "o* ,oth s!des !n a %ont*a%t ne2ot!at!on to +nde*stand that a de"e%t !s a "a+-t '*oa,-y
'*esent !n the 2oods on de-!e*y7 noth!n2 $o*e. In '*!n%!'-e1 +nde* $ost -a#s1 the e6'o*te* !s
-!a,-e on-y "o* '*o,-e$s that a*!se "*o$ de"e%ts.
CONCEPT REDIEWB AET WEADINA
De*,ena Te6t!-e !s *e'-a%!n2 t#enty o" !ts -oo$s. The -oo$s a*e th!*ty yea*s o-d1 and s'a*e 'a*ts
a*e ha*d to "!nd. The "a%to*y en2!nee* %hooses the ,est o" the o-d -oo$s and %ann!,a-!Ees the
othe*s to $a.e t#e-e -oo$s !n 2ood #o*.!n2 o*de*. De*,ena Te6t!-e ne2ot!ates to se-- these
-oo$s to Es'e*anEa Cotton M!--s. Es'e*anEa Cotton #ants t#e-e7$onth #a**anty #!th the
-oo$sm De*,ena Te6t!-e !s '*e'a*ed to se-- the$ on 5as !s.?
1. What a*2+$ents a*e the t#o s!des -!.e-y to '+t "o*#a*d !n ne2ot!at!n2 the #a**anty Mde"e%ts
-!a,!-!ty)&
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
JJJJJJJJJJJJJJJ.
0. Wh!%h s!de do yo+ th!n. !s 5!n the *!2ht?&
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
JJJJJJJJJJJJJJJ.
1. Se%ond7hand $a%h!ne*y !s +s+a--y so-d !nte*nat!ona--y Kas !s.? ;*o$ the ,+ye*Hs 'o!nt o" !e#
th!s has an o,!o+s d!sadanta2el!" the $a%h!ne 2oes #*on21 *e'a!* $ay ,e e6'ens!e o*
!$'oss!,-e. Ho#ee*1 !t $a.es -!tt-e sense "o* the se--e* to o""e* a #a**anty. ;!*st-y he !s not !n
the ,+s!ness o" se--!n2 o* *e'a!*!n2 $a%h!nes. Se%ond-y1 ass+$!n2 he !s '*e'a*ed to o""e* a
#a**anty1 the %ost #o+-d ,e '*oh!,!t!el!n so$e %ases the tota- %ost $!2ht ,e $o*e than the
%ost o" a ,*and7ne# $a%h!ne +s!n2 the -atest te%hno-o2y.
0. Both s!des hae a 'o!nt. The $ost %o$$on so-+t!on !s "o* the ,+ye* to %he%. the $a%h!nes
%a*e"+--y "o* "+-- "+n%t!ona-!ty ,e"o*e ,+y!n2 the$7 an+ then to a%%e't the sa-e #!tho+t
#a**anty.
-rans#ate into >ietnamese
24C1 C3N-R2C-
AENERAG TERMS AN9 C3NDI-I3N1
1W 1.ipment or =e#i&er$
The o,-!2at!ons o" Se--e* to sh!' o* de-!e* the 2oods s'e%!"!ed on the "a%e o" th!s Cont*a%t MKAoodsK)
,y the t!$e o* #!th!n the 'e*!od s'e%!"!ed on the "a%e o" th!s Cont*a%t sha-- ,e s+,Ce%t to the
aa!-a,!-!ty o" the esse- o* the esse-Hs s'a%e
I"1 +nde* the te*$s o" th!s Cont*a%t1 B+ye* !s to se%+*e o* a**an2e "o* the esse- o* esse-Hs s'a%e1
B+ye* sha-- se%+*e o* a**an2e "o* the ne%essa*y esse- o* esse-Hs s'a%e on ,e*th te*$s ,as!s and 2!e
Se--e* sh!''!n2 !nst*+%t!ons #!th!n a *easona,-e t!$e '*!o* to sh!'$ent1 !n%-+d!n2 ,+t not -!$!ted to
the na$e and deta!-ed s%hed+-e o" the esse-. I" B+ye* "a!-s to 2!e s+%h !nst*+%t!ons #!th!n a
*easona,-e t!$e '*!o* to sh!'$ent1 Se--e* $ay1 at !ts so-e d!s%*et!on and at B+ye*Hs *!s. and a%%o+nt1
a**an2e "o* the esse- o* the esse-Hs s'a%e and $a.e sh!'$ent o" the Aoods1 #!tho+t '*eC+d!%e and !n
add!t!on to any othe* *!2hts and *e$ed!es Se--e* $ay hae +nde* th!s Cont*a%t o* at -a# o* !n e>+!ty
o* othe*#!se.
In %ase o" sh!'$ent o* de-!e*y !nsta--$ents1 any de-ay o* "a!-+*e !n sh!'$ent o" one !nsta--$ent sha--
not ,e dee$ed a ,*ea%h o" th!s Cont*a%t 2!!n2 *!se to a *!2ht o" B+ye* to %an%e- th!s Cont*a%t o*
*e"+se to a%%e't 'e*"o*$an%e #!th *es'e%t to othe* !nsta--$ents.
%W +a$ment
I" 'ay$ent "o* the Aoods sha-- ,e $ade ,y a -ette* o" %*ed!t1 B+ye* sha-- esta,-!sh !n "ao* o" Se--e* 7
an !**eo%a,-e -ette* o" %*ed!t th*o+2h a '*!$e ,an. o" 2ood !nte*nat!ona- *e'+te !$$ed!ate-y a"te*
the %on%-+s!on o" th!s Cont*a%t !n a "o*$ and +'on te*$s sat!s"a%to*y to Se--e*.
I" B+ye* "a!-s to $a.e any d+e 'ay$ent1 to esta,-!sh a -ette* o" %*ed!t o* othe*#!se to 'e*"o*$ !ts
o,-!2at!ons he*e+nde*1 Se--e* $ay de$and that B+ye* '*o!de1 #!th!n a *easona,-e t!$e1 ade>+ate
ass+*an%e sat!s"a%to*y to Se--e* o" the d+e 'e*"o*$an%e o" th!s Cont*a%t and $ay #!th o-d sh!'$ent o*
de-!e*y o" any a-- o" the +nde-!e*ed Aoods +nt!- s+%h ass+*an%e !s 2!en.
B+ye* sha-- 'ay the '*!%e s'e%!"!ed on the "a%e o" th!s Cont*a%t #!tho+t set7o"" %o+nte*%-a!$1
*e%o+'$ent o* othe* s!$!-a* *!2hts #h!%h B+ye* $ay hae a2a!nst Se--e*1 #h!%h *!2hts sha-- ,e
e6e*%!sed !n se'a*ate '*o%eed!n2s ,et#een B+ye* and Se--e*.
Any ne#1 add!t!ona- o* !n%*eased "*e!2ht *ates1 s+*%ha*2es M,+n.e*1 %+**en%y1 %on2est!on o* othe*
s+*%ha*2es)1 ta6es1 %+sto$s d+t!es1 e6'o*t o* !$'o*t s+*%ha*2es o* othe* 2oe*n$enta- %ha*2es1 o*
!ns+*an%e '*e$!+$s1 #h!%h $ay ,e !n%+**ed ,y Se--e* #!th *es'e%t to the Aoods a"te* the
%on%-+s!on o" th!s Cont*a%t sha-- ,e "o* the a%%o+nt o" B+ye* and sha-- ,e *e!$,+*sed to Se--e* ,y
B+ye* on de$and.
I" B+ye* "a!-s to 'ay "o* the Aoods !n a%%o*dan%e #!th th!s Cont*a%t1 B+ye* sha-- 'ay to Se--e* as
-!>+!dated da$a2es and not as a 'ena-ty oe*d+e !nte*est at the *ate o" the -o#e* o" e!2hteen 'e*%ent
M18n) 'e* ann+$ o* the $a6!$+$ !nte*est *ate 'e*$!tted ,y the -a#s o" B+ye*Hs %o+nt*y1 %a-%+-ated
"*o$ the date "o* s+%h 'ay$ent +nt!- the a%t+a- date o" 'ay$ent %a-%+-ated on the 4<) day7a7yea*
,as!s "o* the a%t+a- n+$,e* o" days e-a'sed.
*W (ore Male9re
I" the 'e*"o*$an%e ,y Se--e* o" !ts o,-!2at!ons he*e+nde* !s d!*e%t-y o* !nd!*e%t-y a""e%ted o* '*eented
,y "o*%e $aCe+*e1 !n%-+d!n2 ,+t not -!$!ted to A%ts o" Aod1 "-ood1 ty'hoon1 ea*th>+a.e1 t!da- #ae1
-ands-!de1 "!*e1 '-a2+e1 e'!de$!%1 >+a*ant!ne *est*!%t!on1 'e*!-s o" the sea1 #a* de%-a*ed o* not o* th*eat
o" the sa$e %!!- %o$$ot!on1 ,-o%.ade1 a**est o* *est*a!nt o" 2oe*n$ent1 *+-e*s o* othe* -a,o*
d!s'+te1 e6'-os!on1 a%%!dent o* ,*ea.do#n !n #ho-e o* !n 'a*t o" $a%h!ne*y1 '-ant1 t*ans'o*tat!on o*
-oad!n2 "a%!-!ty1 2oe*n$enta- *e>+est1 2+!dan%e1 o*de* o* *e2+-at!on1 +naa!-a,!-!ty o" t*ans'o*tat!on
o* -oad!n2 "a%!-!ty1 ,an.*+'t%y o* !nso-en%y o" the $an+"a%t+*e* o* s+''-!e* o" the Aoods1 o* any
othe* %a+ses o* %!*%+$stan%es #hatsoee* ,eyond the *easona,-e %ont*o- o" Se--e* o* $an+"a%t+*e* o*
s+''-!e* o" the Aoods1 then Se--e* sha-- not ,e -!a,-e "o* -oss o* da$a2e1 o* "a!-+*e o" o* de-ay !n
'e*"o*$!n2 !ts o,-!2at!ons +nde* th!s Cont*a%t and $ay1 at !ts o't!on1 e6tend the t!$e o" sh!'$ent o*
de-!e*y o" the Aoods o* te*$!nate +n%ond!t!ona--y and #!tho+t -!a,!-!ty the +n"+-"!--ed 'o*t!on o" th!s
Cont*a%t to the e6tent so a""e%ted o* '*eented
4W Defa9#t
In %ase o" M!) B+ye*Hs "a!-+*e to 'e*"o*$ any '*o!s!on o" th!s Cont*a%tm M!!) B+ye*Hs !na,!-!ty to 'ay !ts
de,ts 2ene*a--y as they ,e%o$e d+em M!!!) B+ye*Hs ,an.*+'t%y o* !nso-en%y o* M!) a''o!nt$ent o" a
t*+stee1 *e%e!e* o* -!>+!dato* o" B+ye* o" any $ate*!a- 'a*t o" B+ye*Hs assets o* '*o'e*t!es MKEents o"
9e"a+-tK)1 Se--e* $ay1 at !ts so-e d!s%*et!on1 M!) te*$!nate th!s Cont*a%t o* any 'a*t the*eo"m M!!) de%-a*e
a-- o,-!2at!ons o" B+ye* !$$ed!ate-y d+e and 'aya,-em M!!!) *ese-- the Aoodsm M!) ho-d the Aoods "o*
B+ye*Hs a%%o+nt and *!s.m M) 'os'one the sh!'$ent o" Aoodsm o* M!) sto' the Aoods !n t*ans!t1 and
B+ye* sha-- *e!$,+*se Se--e* "o* a-- -osses da$a2es a*!s!n2 d!*e%t-y o* !nd!*e%t-y "*o$ s+%h Eents o"
9e"a+-t.
The *!2hts and *e$ed!es o" Se--e* he*e+nde* a*e %+$+-at!e and !n add!t!on to Se--e*Hs *!2hts1 'o#e*s
and *e$ed!es e6!st!n2 at -a# o* !n e>+!ty o* othe*#!se.
'W Inte##et9a# propert$ rig.ts
Noth!n2 he*e!n %onta!ned sha-- ,e %onst*+ed as t*ans"e**!n2 any 'atent1 t*ade$a*.1 +t!-!ty $ode-1
des!2n1 %o'y*!2ht1 $as. #o*d o* any othe* !nte--e%t+a- '*o'e*ty *!2hts !n the Aoods1 as s+%h *!2hts
,e!n2 e6'*ess-y *ese*ed to the t*+e and -a#"+- o#ne*s the*eo".
Se--e* sha-- ,e ne!the* *es'ons!,-e no* -!a,-e "o* any !n"*!n2e$ent o* +na+tho*!Eed +se #!th *e2a*d to
any 'atent1 t*ade$a*.1 +t!-!ty $ode-1 des!2n1 %o'y*!2ht1 $as. #o*. o* any othe* !nte--e%t+a- '*o'e*ty
*!2hts.
,W :arrant$, #aim
Un-ess e6'*ess-y st!'+-ated on the "a%e o" th!s %ont*a%t1 se--e* $a.es no #a**anty o* %ond!t!on1
e6'*ess-y o* !$'-!ed-y1 Has to the "!tness o* s+!ta,!-!ty o" the 2oods "o* any 'a*t!%+-a* '+*'ose o* +se
o* the $e*%hanta,!-!ty the*eo".
I" any #a**anty e6!sts. Se--e*Hs -!a,!-!ty sha-- ,e -!$!ted to *e'-a%e$ent o* *e'a!* o" the de"e%t!e
Aoods.
Any %-a!$ ,y B+ye* o" #hatee* nat+*e a*!s!n2 +nde* o* !n *e-at!on to th!s Cont*a%t sha-- ,e $ade ,y
*e2!ste*ed a!*$a!- #!th!n th!*ty M4)) days a"te* the a**!a- o" the Aoods at the 'o*t o" dest!nat!on1 o*
so-e-y !n *es'e%t to a %-a!$ a--e2!n2 the e6!sten%e o" a -atent de"e%t !n the Aoods1 #!th!n s!6 M<)
$onths a"te* the a**!a- o" the Aoods at the 'o*t o" dest!nat!on1 and any s+%h %-a!$ sha-- %onta!n "+--
'a*t!%+-a*s #!th e!den%e %e*t!"!ed ,y an a+tho*!Eed s+*eyo*.
6W Limitation
Se--e* sha-- not ,e *es'ons!,-e1 #hethe* !n %ont*a%t o* #a**anty1 to*t o* on any othe* ,as!s1 to B+ye*
"o* any s'e%!a-1 !n%!denta-1 %onse>+ent!a-1 !nd!*e%t o* e6e$'-a*y da$a2es1 and !n no eent sha--
Se--e*Hs tota- -!a,!-!ty on any o* a-- %-a!$s "*o$ B+ye* e6%eed the '*!%e o" the Aoods.
8W <enera#
M1) A-- d!s'+tes1 %ont*oe*s!es o* d!""e*en%es a*!s!n2 o+t o" o* !n *e-at!on to th!s Cont*a%t o* the
,*ea%h the*eo" #h!%h %annot ,e sett-ed ,y $+t+a- a%%o*d #!tho+t +nd+e de-ay sha-- ,e sett-ed ,y
a*,!t*at!on !n To.yo1 Ja'an1 !n a%%o*dan%e #!th the *+-es o" '*o%ed+*e o" the Ja'an Co$$e*%!a-
A*,!t*at!on Asso%!at!onm the a#a*d o" a*,!t*at!on sha-- ,e "!na- and ,!nd!n2 +'on ,oth 'a*t!es1 and
C+d2$ent on s+%-! a#a*d $ay ,e ente*ed !n any %o+*t o* t*!,+na- ha!n2 C+*!sd!%t!on the*eo"m th!s
Cont*a%t sha-- ,e1 !n a-- *es'e%ts1 2oe*ned ,y and %onst*+ed !n a%%o*dan%e #!th the -a#s o" Ja'anm
the t*ade te*$s he*e!n +sed1 s+%h as ;OB1 C;R and CI;1 sha-- ,e !nte*'*eted !n a%%o*dan%e #!th
KINCOTERMS 0)))K.
M0) The "a!-+*e o" Se--e* at any t!$e to *e>+!*e "+-- 'e*"o*$an%e ,y B+ye* o" the te*$s he*eo" 7sha--
not a""e%t the *!2ht o" Se--e* to en"o*%e the sa$em the #a!e* ,y Se--e* o" any ,*ea%h o" any '*o!s!on
o" th!s Cont*a%t sha-- not ,e %onst*+ed as a #a!e* o" any s+%%eed!n2 ,*ea%h o" s+%h '*o!s!on o*
#a!e* o" the '*o!s!on !tse-".
M4) Th!s Cont*a%t %onst!t+tes the ent!*e a2*ee$ent ,et#een the 'a*t!es he*eto and s+'e*sedes a-- '*!o*
o* %onte$'o*aneo+s %o$$+n!%at!ons1 a2*ee$ents o* +nde*ta.!n2s #!th *e2a*d to the s+,Ce%t $atte*
he*eo"m th!s Cont*a%t $ay not ,e $od!"!ed o* te*$!nated e6%e't ,y a #*!tten a2*ee$ent o" Se--e* and
B+ye*.
M8) B+ye* sha-- not t*ans"e* o* ass!2n th!s Cont*a%t o* any 'a*t the*eo" #!tho+t Se--e*Hs '*!o* #*!tten
%onsent.
(page 149) CAPTE! 4" TE LEGAL F!A#E$O!%
1. The B&g P&'t(re
TE P!OBLE#
Man' exporters are gifted sa%esmenF and their )ontra)ts ref%e)t this emphasis on sa%es!
9nfort/nate%'F there are a n/m4er of %ega% %oose ends that m/st 4e tied do5n if a good
sa%es te)hniJ/e is to mat/re into a profita4%e 5a' of doing 4/siness!
TE P!INCIPLE
,ie the other phases of an export negotiationF the %ega% frame5or )an 4e negotiated in
)%ear steps- in this )ase six!
IN #O!E DEPT
A )ontra)t is not mere%' a %ist of ideas agreed 4' the exporter and the 4/'er d/ring
negotiation: it is an enfor)ea4%eF %ega% instr/ment! The t5o sides ignore the %ega%
dimensions of the )ontra)t at their peri%!
;TE( 1! TQE A((,+CA.,E ,AK: )hoi)e of %a5
;TE( "! C:#TRACT :R #: C:#TRACTP Meeting of mindsF )apa)it'F %ega%it'F
)onsideration!
;TE( 3! E#T+RE ARREEME#T! Khereas re)ita%F )ontra)t do)/mentsF definitions!
;TE( 4! TQE (ART+E;! +dentit'F namingF noti)esF assignment!
;TE( 2! ;TAT9; :8 TQE C:#TRACT! TerminationF )an)e%%ationF re)issionF %ang/age!
;TE( 3! ;ETT,EME#T :8 $+;(9TE;! Ami)a4%e sett%ementF ar4itrationF %itigation!
The first J/estion a4o/t the %ega% frame5or of the )ontra)t is a%5a's: 5hat %a5 ha&e the
t5o sides )hosen to fi%% the gaps in their agreement (;tep 1)! Then the J/estion arises is the
do)/ment the parties are signing rea%%' a )ontra)tF or is S/st a pie)e of paper (;tep ")P +f it is
a )ontra)tF is it the entire agreementP And if it is the entire agreementF ho5 do the t5o sides
ens/re that it in)%/des e&er'thing the' 5ant it to in)%/de (;tep 3)P
:n)e the f/%% %ega% nat/re of the )ontra)t is esta4%ishedF it is time to t/rn to the parties
signing it! Are the parties a%% the' seem to 4eP And 5i%% the' remain the same d/ring the
%ifetime of the )ontra)t (;tep 4)P
Rood re%ations /s/a%%' pre&ai% d/ring the negotiation of a )ontra)t! ,aterF ho5e&erF things
)an go 5rong! A good )ontra)t a%%o5s for this 4' foreseeing )ir)/mstan)es /nder 5hi)h the
parties might 5ish to end their agreement (;tep 2)! +f a disp/te arisesF some means of
sett%ing things sho/%d 4e agreed 4eforehand: that 5a' at %east some good5i%% might 4e
preser&ed and the )ost of the disp/te minimiOed (;tep 3)!
CQ::;+#R A# A((,+CA.,E ,AK
Khat )onsiderations sho/%d an exporter 4ear in mind 5hen negotiating an app%i)a4%e %a5P
A%tho/gh nationa% %a5s differ great%' in detai%F most %a5s 4e%ong to one of t5o fami%ies:
Ang%o-Ameri)an or Continenta%! The Ang%o-Ameri)an fami%' is 4ased on )ase-%a5 (the %a5
de&e%ops o&er )ent/ries thro/gh )o/rt de)isions)T the Continenta% fami%' is 4ased on a %ega%
)ode (the %a5 is expressed in a )ode)! The t5o s'stems 5or in different 5a's and prod/)e
different inds of )ontra)t!
Ang%o-Ameri)an )ontra)t %a5 is )ase %a5: S/dges de)ide )ases on their merits (the rights
and 5rongs of the )asesT de)isions )reate pre)edents! A pre)edent is 4inding: f/t/re S/dges
(s/4Se)t to )omp%ex r/%es( are o4%iged to fo%%o5 it! After a 5hi%eF so man' pre)edents exist
that e&en the 4est S/dges 4e)ome )onf/sed! The )ase-%a5 prin)ip%e has a remara4%e
res/%t: no4od' no5s the %a5 in a gi&en )ase /nti% the S/dge rea)hes a de)ision! The Ang%o-
Ameri)an %a5'er )an s/ggest the o/t)ome of a )ase- 4/t )ertain%' is impossi4%e! 9nder
Continenta% s'stemsF o/t)omes are more predi)ta4%e: S/dges simp%' app%' the )ode- the'
are not reJ/ired to /se their sense of S/sti)e to see the fairest so%/tion to the )ase!
Scenario: #onamia 5as /nti% re)ent%'F a so)ia%ist )o/ntr' 5ith-no de&e%oped )ommer)ia%
%a5Uin fa)tF the ne)essar' %a5 is sti%% not p/4%ished! A4et 7ohnson r/ns a fa)tor' in
#onamia that maes J/a%it' Sogging shoes! Qe re)ei&es se&era% inJ/iries from E/ropean
)o/ntries! :ne )/stomerF 8ranimport! is interested eno/gh to s/ggest some 4road
)ontra)t terms: pri)eF de%i&er' da%eF %ength of defe)ts %ia4i%it' period! 7ohnson no5 ass a
%a5'er in #onamia to draft a )ontra)t!
Ear%' in the dis)/ssionF the %a5'er ass 7ohnson: VKhat %a5 app%ies to the )ontra)tPV
7ohnson has no idea! The %a5'er exp%ains the prin)ip%e: a )ontra)t )o&ers man' iss/esT
an'thing %eft /nde)ided is reg/%ated 4' the app%i)a4%e %a5! The %a5'er %ists three
possi4i%ities:
- The exponerWs %a5 (the %a5 of #onamia):
- The 4/'erWs %a5 (the %a5 of Rerman')T
- A third-part' %a5 (e!g!! the %a5 of ;5eden or of Eng%and)!
Ea)h option is radi)a%%' different: !
X
,ption $: #onamia has no )ontra)t %a5Uthere is no 5ater ro/nd the fish! +f there is a
disp/teF the #onamian S/dge m/st mae a de)isionF . 4/t this de)ision is /npredi)ta4%e: To
gain some degree of )ertaint'F the parties m/st 5rite a )ontra)t detai%ed eno/gh to )o&er
most e&ent/a%ities! This is diffi)/%t and expensi&eT e&en 5hen it is )omp%etedF the #onamian
S/dge ma' not enfor)e it as the parties intended!
,ption %: Rerman )ontra)t %a5 is )odified! The )ode (the .R.) has 4een )%arified 4' a
h/ndred 'ears of interpretation in the )o/rts! The )ontra)t )an 4e short and to the pointUon
the other hand /sing the %a5F of the 4/'erWs )o/ntr' gi&es the 4/'er a perhaps /nfair
ad&antage in the e&ent of a disp/te!
,ption. &: Choosing a third-part' %a5UEng%ish %a5 perhaps or ;5edish %a5Ugi&es neither
side an ad&antage! ./t the %a5 m/st 4e )hosen )aref/%%'! ;5edish %a5 is a mem4er of the
Continenta% fami%'! The )ontra)t )an 4e short and to the pointU;5edish %a5 (5e )an
s/ppose) 5i%% fi%% gaps in the )ontra)t fair%' and reasona4%'! Eng%ish %a5F on the other handF
is a mem4er of the Ang%o-Ameri)an fami%'!
The ad&antage of Eng%ish %a5 is that its prin)ip%es ha&e 4een refined o&er man' )ent/ries to
dea% 5ith internationa% trade: it is internationa%%' fami%iar and extreme%' f%exi4%eT if the parties
draft the )ontra)t )aref/%%'F the' )an a)hie&e a%most an' res/%t the' 5ish! :n the other
handF a )ontra)t /nder Eng%ish %a5 is /s/a%%' %ength' and
derai%ed: Eng%ish %a5 is )ase %a5F so the parties norma%%' de)ide man' iss/es ahead of time
rather than %ea&ing the S/dge to mae de)isions on the 4asis of pre)edents!
The )hoi)e of an app%i)a4%e %a5 is not eas'U4/t it is 5iser to )hoose a %a5 than to %ea&e
the iss/e open! A s/mmar' of the fa)tors in&o%&ed:
A#R,:-AMER+CA#
;G;TEM;
C:#T+#E#TA, ;G;TEM;
R:A, 7/sti)e in the indi&id/a% )ase Consisten)' and /niformit' of
enfor)ement
(RE$+CTA.+,+TG
A#$
C:#;+;TE#CG
:8 C:9RT
$EC+;+:#;
9n%ess matters are )aref/%%'
reg/%ated in the )ontra)tF the
de)ision of the S/dge is not
f/%%' predi)ta4%e! $ifferent
S/dJes ma' gi&e 5ide%'
different S/dgments!
$e)isions in a%% 4/t the most
diffi)/%t )ases are pre)i)ta4%e
5ith some a))/ra)'! $e)isions
are genera%%' )onsistent from
)o/rt to )o/rt!
,E#RTQ A#$
$ETA+, :8
C:#TRACT
To 4e )%earF )ontra)ts m/st
reg/%ate man' iss/esF so the'
tend !to 4e %ong and detai%ed!
.e)a/se the %a5 reg/%ates
most pro4%emsF )ontra)ts )an
4e short and %a)ing in detai%!
+#TER#AT+:#A,
ACCE(TA#CE
Eng%ish and Amen)an %a5
ha&e 4een refined o&er the
)ent/ries to )ope 5ith iss/es
of intemationa% trade! The
prin)ip%es are 5ide%'
/nderstood and respe)ted!
Continenta% %a5s do not ha&e
the prestige of Angto-Arnen)an
%a5s in internationa% pra)ti)e!
The' tend to fo)/s on nationa%
rather than interna%ionat iss/es
;ometimes the parties )annot agree an app%i)a4%e %a5F so the' %ea&e the matter open- the
)ontra)t )ontains no pro&ision at a%% on app%i)a4%e %a5! Khat thenP +f the )ontra)t does not
spe)if' an app%i)a4%e %a5F then a spe)ia% 4ran)h of %a5 no5n as -internationa% pri&ate %a50
)omes in'o p%a' and de)ides the %a5 of the )ontra)t! +n the )ase of an export )ontra)tF
espe)ia%%' an E-F 8-F or C- term )ontra)tF the %a5 )hosen is near%' a%5a's the %a5 of the
exporter! +n o/r #onamian Sogging-shoe s)enario a4o&eF that means the )hoi)e of
#onamian %a5- andF a great dea% of /n)ertaint'!
The )ontra)t )%a/se that spe)ifies the app%i)a4%e %a5 sho/%d 4e )aref/%%' 5orded! +t sho/%d
state not on%' that the )hosen %a5 that s/pp%ements the pro&isions of the )ontra)tF 4/t a%so
that it reg/%ates some diffi)/%t iss/es- $o the partes a)t/a%%' ha&e a )ontra)tP Khat r/%es of
interpretation sha%% app%'P And so on!
C:#CE(T REV+EK 1
S5o%! "n Sh"%e!
(%o/gh ;hares is a Ver4enan )ompan' maing non-me)hani)a% farm eJ/ipment! :n 3
rd
7/%' "DD4 it re)ei&es a %etter from Kide QoriOon 8arm Too%s in EsperanOa! The %etter ass
(%o/gh ;hares to J/ote its %atest pri)e on t5o of its )ata%og itemsT 1DD2L3 Matto)s and
"D31Y" ;ho&e%s! :rder siOe is 2DD of ea)h item! The t5o )ompanies ha&e ne&er done
4/siness together!
(%o/gh ;hares J/otes N4FDDD for the matto)s and N"F2DD for the sho&e%s! :n the J/otation is
)%ear%' stamped: V:/r Renera% Conditions of ;a%e app%' to a%% de%i&eries!V!
An order arri&es exa)t%' in %ine 5ith the offer ex)ept that it is stamped: V:/r Renera%
Conditions of (/r)hase app%' to this :rder!V (%o/gh ;hares )onfirms the orderF stamping itF
as 4efore: V:/r Renera% Cond/ions of ;a%e app%' to a%% de%i&eries!V The goods are de%i&ered
8:. on 4th ;eptem4erT the' are inspe)ted and a))epted 4' the 4/'er on 4th :)to4er! The
in&oi)e sent 4' (%o/gh ;hares is a%so stamped 5ith the fami%iar stamp! Kide QoriOon pa's
for the goods!
Then there is a serio/s 5arrant' )%aim: the hand%es of 4oth the matto)s and the sho&e%s
4rea easi%'! :n 14th Mar)h Kide QoriOon notifies (%o/gh ;hares of the pro4%em! (%o/gh
;hares sa's VToo 4adU the defe)ts %ia4i%it' period has expired!V Kide QoriOon rep%ies:
V#ot at ai%Uthe period r/ns for another t5o 5ees!V The disagreement arisesF as 'o/
ha&e pro4a4%' g/essedF 4e)a/se the ;e%%erWs genera% )onditions a%%o5 a six-month
5arrant' from the date of de%i&er'F and the ./'erWs Conditions a six-month 5arrant' from
the date of a))eptan)e!
1! +s the origina% %etter from Kide QoriOon an Voffer to 4/'VP
GE; #:
"! +s the J/otation from (%o/gh ;hares an offer to se%%P
GE; #:
3! +s the order p%a)ed 4' Kide QoriOon an offer to 4/' or is it an a))eptan)eP
:88ER T: .9G ACCE(TA#CE
4! +s there a )%ear and f/%% a))eptan)e of an offer at an' stage of the negotiation P
GE; #:
2! $o the t5o sides ha&e a )ontra)tP
GE; #: ,ERA, (:;+T+:# #:T CERTA+#
3! +f 'es! 5ho is right on the 5arrant' )aseP
(,:9RQ ;QARE; K+$E Q:R+Y:# ,ERA, (:;+T+:# #:T CERTA+#
1! #o! +t is a reJ/est for J/otation! "! Ges
3! :ffer 1D 4/'! There is a maSor dis)repan)' 4et5een the terms of the oner and
the Va))eptan)e!0 4! #o
2! The %ega% position is /n))ertain!
3! Again /n)ertain! +f there is a )ontra)tF the terms are /n)%ear!
C:#CE(T REV+EK " O-t Of The :ino5
Ver4ena 8arm (o5er is taing de%i&er'T of 3DD gaso%ine po5ered mini-generators (2 K) for
farm /se! The s/pp%ier is a Rerman )ompan'F ;/pergrid! After signing the )on)ra)tF
Ver4ena 8arm rea%iOes that ;/pergridWs pri)e is too high: the same eJ/ipment is a&ai%a4%e in
the 9nited ;tates at ha%f the pri)e! ;o Ver4ena 8arm is de%ighted 5hen a ne5 Ro&ernment
:rder prohi4its a%% ma)hines %o/der than 6D de)i4e%s! Ver4ena 8arm arg/es that sin)e the
Rerman ma)hine prod/)es 62 de)i4e%sF it is i%%ega% and the )ontra)t is n/%% and &oid!
;/pergrid offers to thi)en the so/nd ins/%ation on the ma)hineT Ver4ena 8arm ref/ses this
offer! +magine no5 three &ersions of the )ontra)t! Version 1 )ontains this )%a/se:
Se/erabilit0
*n the e/ent that an0 pro/ision of the 1greement is held to be illegal or other+ise
unenforceable# such pro/ision shall be deemed to ha/e been deleted from this
1greement# +hile the remaining pro/isions shall be and shall continue in full force
and effect.
Version " )ontains this 5ording
Partial *n/alidit0
*f an0 pro/ision or pro/isions of this contract are in/alid# or become in/alid# this
has no effect on the /alidit0 of the remaining pro/isions.
*f an0 pro/ision of this contract is in/alid# or becomes in/alid# tne parties ha/e the
dut0 to replace the in/alid pro/ision +ith a ne+ /alid pro/ision that fulfills the
original intent of the in/alid pro/ision
Version 3 sa's nothing ai a%% on this s/4Se)t!
Khi)h &ersion of the )ontra)t is most fa&ora4%e to Ver4ena 8armWs arg/mentP Khi)h
&ersion is %east fa&ora4%eP
,east fa&ora4%e: VER;+:# 1 VER;+:# " VER;+:# 3
Most fa&ora4%e: VER;+:# 1 VER;+:# " VER;+:# 3
,east fa&ora4%e for Ver4ena 8arm is Version ": this 5ording )%ear%' o4%iges the parties
to redraft the disp/ted )%a/se!
The most fa&ora4%e &ersion is possi4%' &ersion 3U4/t e&er'thing then depends on the
app%i)a4%e %a5! +s a part%' i%%ega% )ontra)t 5ho%%' i%%ega% /nder the %a5 that app%ies to this
)ontra)tP +f Rerman %a5 app%iesF for examp%eF the ans5er in )ase of do/4t is VGes!V
C:#CE(T REV+EK 3 T"2en into Con!ie%"tion
Renera% ;/pp%iesF a Ver4enan )ompan'F trades in foodF )%othingF ho/seho%d goodsF and so
on! +t has an export )ontra)t 5ith 8ranimportF a Rerman )ompan'F to se%% 4DD )artons of
pineapp%e rings in 2DD gram )ans! T5o 5ees 4efore de%i&er' is d/eF 8ranimport sends the
fo%%o5ing fax to Renera% ;/pp%ies:
2ill 0ou please change our order to $&$ cartons of pineapple 3uice# $$" cartons of
pineapple chunks# and %"" cartons of pineapple rings. 1ccording to the price list
0ou sent us# the total in/oice price is no+ exactl0 the same as the original price.
Please confirm the ne+ arrangement immediatel0.
Renera% ;/pp%ies )onfirms the ne5 order 5ith the fo%%o5ing fax:
2e hereb0 confirm 0our change of order. 2e shall no+ send $&$ cartons of
pineapple 3uice# $$" cartons of pineapple chunks# and %"" cartons of pineapple
rings. 4here is no change in the price.
The goods are de%i&ered 8:. ((ort Ver4ena) and paid for /nder a %etter of )redit! Khen the
goods arri&e in .remenF ho5e&erF 8ranimport finds 4DD )artons of pineapp%e rings! +t
informs Renera% ;/pp%ies immediate%' that it is reSe)ting ha%f the )onsignmentF as de&iating
from the agreement as modified! Renera% ;/pp%ies rep%ies that the origina% )ontra)t 5as
ne&er modified a))ording to the %a5 of Ver4enaF and that 8ranimport m/st a))ept the
5ho%e )onsignment!
1! Khat is the so/r)e of this disp/teP ZZZZZZZZZZZZZZZZZZZ!
"! The %a5 of Ver4ena (5hi)h is a mem4er of the )ommon-%a5 fami%') app%ies to the
)ontra)t! Kho is right a4o/t the &a%idit' of the modifi)ationP
RE#ERA, ;9((,+E; 8RA#H+M(:RT
3! ;e)tion "-"D6!1 of the Uniform (ommercial (ode states:
1n agreement modif0ing a contract..needs no consideration to be binding.
+f there 5ere a simi%ar reg/%ation in Ver4enaF ho5 5o/%d it affe)t this disp/teP
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
1! The disp/te arises 4e)a/se ah agreenWni to modif' a )ontra)t reJ/iresF /nder some
%a5sF )onsideration: 4oth sides m/st ha&e ne5 riss and d/ties /nder the ne5
agreement! +n this )ase! on%' Renera% ;/pp%ies has a ne5 d/%' and on%'
8ranimport has a ne5 right!
"! Renera% ;/pp%ies
3! Consideration 5o/%d not 4e reJ/iredF and 8ranimport 5o/%d 4e S/stified in re%'ing
on the modifi)ation and reSe)ting the goods!
T%"n!#"te into 7ietn"0e!e
JOINT VENTURE CONTRACT.
Based on: )
& T*e +aw on ,oreign Investment in Vietnam approved b t*e -ational
./ssembl o0 t*e Socialist 1ep2blic o0 Vietnam. on December 23
t*
4 13"'
& T*e Decree 2356D7T on ,ebr2ar (
t*
4 1331 o0 t*e 8o2ncil o0 9inisters
reg2lating in detail tli: implementation o0 t*e +aw on ,oreign Investment in
Vietnam
Toda4 1
st
December4 19 ... t*e Parties *ave agreed to sign t*is contract to
establis* a ;oint Vent2re 8ompan !.;V8.$ on t*e terms and conditions as
0ollows<
Ar!"#e 1: -/9ES =, T6E P/1TIES T= T6E ;=I-T VE-T>1E)
VIET-/9ESE P/1T-E1 !P/1T? /$<
DEP/1T9E-T =, 6=9E T1/DE 6/-=I
6ead o@ce at 10 +e +ai Street4 6anoi
Socialist 1ep2blic o0 Vietnam
Tel< 2%2%'" ,ax< !"#$ 2 &%#%32
1epresented b< 91. D>=-A DI-6 & $!re"or
,=1EIA- P/1T-E1 !P/1T? 7$<
I9EB P/- & P/8I,I8 I-8
/ 8ompan registered and incorporated in t*e 1ep2blic o0 t*e
P*ilippines wit* *ead o@ce< Aro2nd Coor4 8orint*ian PlaDa4 Pasea
de 1oxas4 +egaspi Village4 9aEati4 9anila4 P*ilippines
Tel< "10#F31&3#4 Tlx< (%'1# P6+9PBP-4 ,ax< (F2&"10&10&10)
1epresented b< 9r. ;=6-/T6/- 6. -A>?E- & President
Ar!"#e %: -/9E4 6E/D =,,I8E4 =7;E8TIVE =, ;V8 .
T*e ;=I-T VE-T>1E 8=9P/-? s*all be named as<
& International -ame< 6anoi Aeneral 8ommercial 8entre
& 6ead =@ce< 6ang 7ai Street corner Trang Tien Street
6anoi4 Socialist 1ep2blic o0 Vietnam
T*e ;=I-T VE-T>1E 8=9P/-? s*all be a limited compan
granted t*e stat2s o0 a G2ridical person s2bGect to Vietnam laws4 stip2lated
m t*e ;oint Vent2re 8ontract and 8*arter o0 t*e ;oint Vent2re . H
& 9ain obGectives o0 t*e ;oint Vent2re 8ompan
72ilding and operating # Star 6otel4 and 72siness 8entre o0
international standards to be located at 6ang 7ai Street on t*e
corner o0 Trang Tien Street4 6anoi4 Socialist 1ep2blic o0 Vietnam<
& T*e ;oint Vent2re 8ommercial 8entre a0ter completion will
*ave t*e 0ollowing 0acilities<
1$ # Star 6otel
2$ 72siness 8entre wit* o@ce space 0or rental in accordance wit* International
Standards
F$ 1esta2rants4 7ars4 Discos4 ,2nction 1ooms4 0ood and beverage 0acilities and
ot*er 6otel related 0acilities 0or to2rist services
Ar!"#e&': I-VESTED /-D +EA/+ 8/PIT/+ I 8/PIT/+ 8=-T1I7>TI=-
I-81E/SE /-D T1/-S,E1
& ProGect cost< >SDxx40004000.00 !xx million >S Dollars$
& +egal capital< >SDxx40004000.00 and contrib2ted b t*e two Parties as 0ollows<
>SD xx40004000.00 b part / !F0J$
>SD xx40004000.00 b part 7 !'0J$
&+oan< >SD xx4:=:4000.00 to be borrowed 0rom an Knancial instit2tion
and arranged b Part 7 0or t*e ;oint Vent2reL terms and conditions o0 t*e
loan will be m2t2all agreed on b bot* parties
T*e G2ridical responsibilities o0 eac* part 0or t*e t*ird part is wit*in its
contrib2ted capital. /ll legal capital will be contrib2ted in a l2mp s2m or
installments at appropriate periods agreed on b bot* parties and t*e State
8ommittee 0or 8o&operation and Investment.
I0 eit*er o0 t*e two parties does not 0ollow t*e Sc*ed2le o0 8apital 8ontrib2tion4
t*at part s*all *ave to in0orm t*e ot*er part wit*in 30 das be0ore and s*all
be responsible 0or&an losses ca2sed b t*e s2c* 0ail2re
8/PIT/+ 8=-T1I7>TI=-
T*e capital contrib2ted b Part ./. s*all be >SD xx40004000.00 comprising o0<
& +and rental 0or xx ears
& ,ees 0or t*e retirement and relocation o0 present emploees
& ,ees 0or clearing t*e constr2ction area
T*e capital contrib2ted b part 7 s*all be >SD xx4%004000.00 comprising o0
arc*itect2ral design4 materials4 eM2ipment4 worEing capital and ot*er expenses
8/PIT/+ I-81E/SE
=n t*e basis o0 t*e needs o0 development d2ring t*e operation4 t*e ;oint
Vent2re 8apital can increase its legal capital in t*e 0ollowing 0orms<
& 1einvesting t*e proKt s*are o0 eac* part.
& 8ontrib2ting new capital
T*e increase o0 t*e legal s*all be agreed b bot* parties and be approved b
t*e State 8ommittee 0or 8o&operation and Investment
8/PIT/+ T1/-S,E1
D2ring operation4 eit*er part can trans0er its capital contrib2tion to t*e ot*er
part or t*e t*ird part approved b t*e State 8ommittee 0or 8o&operation and
Investment
( Ar!"#e #< D>1/TI=- =, T6E 8=-T1/8T
T*e stip2lated d2ration o0 t*is contract is )) ears 0rom t*e o@cial date o0
establis*ment o0 t*e ;oint Vent2re and can be extended b t*e agreement o0 t*e
Parties *ereto toget*er wit* and s2bGect to t*e approval o0 t*e State 8ommittee
0or 8o&operation and Investment
( Ar!"#e *: 1ESP=-SI7I+ITIES =, E/86 P/1T? .
P/1T? /)S 1ESP=-SI7I+ITIES
1.. To contrib2te its capital (as stip2lated !n /rticle F o0 t*is contract$
2. To complete t*e application 0ormalities to obtain t*e investment license and
ot*er necessar permits 0or t*e establis*ment o0 t*e ;oint Vent2re 8ompan
F. To obtain all necessar permits 0or Part 7)s personnel to sta and worE in
Vietnam
#. To taEe part in controlling in t*e ;oint Vent2re
%. To do all necessar tasEs to 0acilitate t*e operation o0 t*e ;oint Vent2re
P/1T? 7)S 1ESP=-SI7I+ITIES
1. To contrib2te its capital !as stip2lated in /rticle F o0 t*is contract$
2. To taEe part in controlling t*e ;oint Vent2re
F. To provide its Enow&*ow and management experience to t*e ;oint Vent2re <
#. To advise on and s2ppl t*e tec*nical data 0or )mac*iner necessar
eM2ipment and materials 0or t*e ;oint vent2re so t*at part / can st2d t*eir
2se and s2ppl 0or an import M2ota w*en necessar.
%. To st2d marEets and imported commodities s2c* as mac*iner4 eM2ipment4
materials4 accessories4 etc.4 t*ro2g* its 6ead =@ce and5or 7ranc*es
(. To provide Part / wit* lists and prices o0 commodities w*ic* are not available
in Vietnam
'. To ens2re capital 0or b2ilding4 t*e 0o2ndation o0 t*e 6otel and 72siness 8entre
". To ens2re t*e availabilities o0 t*e worEing capital to maEe t*e b2siness
proKtable
3. To marEet t*e 6otel and 72siness 8entre and 2se its best endeavo2rs to
attract and bring in 0oreign to2rists to patronise t*e 6otel 72siness 8entre
9>T>/+ =7+IA/TI=-S
1. =n t*e basis o0 labo2r contracts4 t*e ;oint Vent2re 8ompan s*all emplo4
appoint4 terminate and s2pervise t*e 7oard o0 Directors in t*eir emploing4
appointing4 terminating4 and s2pervising ot*er personnel o0 t*e ;oint Vent2re
2. Salaries and s2bsidies o0 all personnel o0 t*e ;oint Vent2re s*all be paid b t*e
;oint Vent2re 8ompan
F. Salaries and s2bsidies 0or 0oreign personnel s*all be paid in 0oreign c2rrenc
#. To 02rt*er t*e best interests o0 t*e ;oint Vent2re4 bot* parties can reM2est t*e
7oard o0 9anagement to c*ange or replace personnelL an c*ange or
replacement s*all not be implemented wit*o2t proper reasons
%. 8itiDens o0 Vietnam *ave priorit to be recr2ited to worE 0or t*e ;oint Vent2reL
t*e ;oint Vent2re can emplo 0oreign experts 0or worE reM2iring *ig*l tec*nical
sEills w*ic* cannot be done b t*e Vietnamese citiDens
(. /n interest and obligation o0 Vietnamese personnel worEing 0or t*e ;oint
Vent2re s*all be ens2red b t*eir labo2r contracts in accordance wit* Vietnam
labo2r 1eg2lations 0or enterprises wit* ,oreign 8apital
'. Salaries and ot*er s2bsidies 0or Vietnamese personnel s*all be paid in
Vietnamese Dong c2rrenc
". D2ring operation o0 t*e ;oint Vent2re t*e 7oard o0 Directors s*all organiDe
reg2lar training programs 0or Vietnamese personnel o0 t*e ;oint Vent2re
3. T*e 7oard o0 Directors4 d2ring4 t*e operation o0 t*e ;oint Vent2re s*all
arrange t*e sc*ed2le o0 training and visits 0or Vietnamese managers worEing 0or
t*e ;oint Vent2re
10. 7ot* parties s*all in0orm eac* ot*er o0 all t*eir maGor policies w*ic* aNect
t*e ;oint Vent2re
( Ar!"#e +: 8=-T1=+ /-D 9/-/AE9E-T
T*e 6ead o0 t*e. 8ompan s*all be its 7oard o0 9anagement consisting o0 3
!nine$ members appointed as 0ollows<
& Part ./. s*all appoint F !t*ree$ members
& Part .7. s*all appoint ( !six$ members
O T*e powers4 d2ties4 activities4 and& terms o0 t*is< 7oard o0 9anagement s*all
be stip2lated in t*e 8*arter o0 t*e ;oint Vent2re
7=/1D =, DI1E8T=1S
T*e 7oard o0 Directors o0 t*e ;oint Vent2re 8ompan s*all be appointed b t*e
7oard o0 9anagement on t*e basis o0 t*e agreement between t*e two parties .
& T*e Krst 7oard o0 Directors 0or t*e initial period lasting % ears o0 t*e ;oint
Vent2re s*all be appointed as 0ollows<
& Aeneral Director and Vice Aeneral
Director o0 ,inance< 7 Part 7
& 9anaging Director and 8*ie0 /cco2ntant< 7 Part / &
( Ar!"#e ,: ,IS8/+ ?E/1
T*e Kscal ear o0 t*e ;oint Vent2re s*all commence on ;an2ar 1
st
and terminate
on December F1
st
o0 t*e same ear
T*e Krst Kscal ear s*all commence 0rom t*e o@cial date o0 establis*ment to
t*e December F1
st
o0 t*e same ear
( Ar!"#e -: P1I-8IP+ES =, /88=>-TI-A
T*e ;oint Vent2re 8ompan s*all implement) its acco2nting sstem on t*e basis
o0 Vietnamese /cco2nting principles and standards and be c*ecEed b
Vietnamese ,inancial =rganiDation !as stated in /rticle 1" o0 +aw on ,oreign
Investment in Vietnam as a0oresaid$
( Ar!"#e 9: ?E/1+? /88=>-TI-A 1EVIEP )
Ever ear4 t*e ;oint Vent2re s*all be responsible 0or its acco2nting review in
con0ormit wit* reg2lations o0 t*e Vietnam AovernmentL doc2ments o0 t*e
earl acco2nting review )m2st be s2bmitted to t*e relevant a2t*oriDed
organiDation a0ter approval b t*e 7oard o0 9anagement
( Ar!"#e 1.: I-S>1/-8E
7ot* parties agree to c*oose a Vietnamese ins2rance compan to ins2re t*e
assets o0 t*e ;oint Vent2re
( Ar!"#e 11: P1=,IT&P1=,IT S6/1I-A& EST/7+IS69E-T ,>-DS
T*e ;oint Vent2re and its 0oreign partner s*all be liable to 02lKll t*eir Knancial
obligations to t*e Vietnam Aovernment as stip2lated in t*e Investment +icense
iss2ed b t*e State 8ommittee 0or 8ooperation and Investment
/0ter 02lKlling all its Knancial obligations to t*e Vietnamese Aovernment4 t*e
;oint Vent2re s*all 2se %J o0 its proKt to set 2p a reserve 02ndL =t*er 02nds s*all
be establis*ed in con0ormit wit* Vietnamese +aws
T*e reserve 02nd s*all be limited to not more t*an 2%J o0 t*e legal capital in
accordance wit* /rticle F0 o0 t*e +aw on ,oreign InvestmentL t*e 7oard o0
Directors s*all decide t*e proKt s*are o0 bot* parties as 0ollows<
ProKt s*aring 0or t*e initial )) ears o0 t*e ;oint & Vent2re
& Part /< F0J
& Part 7< '0J
T*e proKt s*aring o0 bot* parties s*all /e as 0ollows<
/0ter xx ears a0ter xx ears a0ter xx ears
Part /< F%J #0J %0J
Part 7< (%J (0J %0J
Part 7 can remit t*e 0ollowing abroad<
& ProKt 0rom t*e b2siness . . 4
& 1eceipts 0rom s2ppling services and tec*nolog trans0ers
. & 9one 0rom loans and interest o0 t*e said loans
& 9one and ot*er assets o@ciall belonging to Part 7
,oreign personnel worEing 0or t*e ;oint Vent2re can remit t*eir legal income
a0ter ret2rning t*eir income tax in con0ormit wit* reg2lations on 0oreign
exc*ange O control o0 VietnamL D2ring operation o0 t*e ;oint Vent2re losses o0
t*e ;oint Vent2re in an Kscal ear s*all be compensated b proKts in 0ollowing
ears b2t t*is s*all no longer4 be valid a0ter Kve ears as stip2lated in /rticle 2'
o0 t*e law on ,oreign4 Investment
Ar!"#e 1%: EBPE-SE ,=1 EST/7+IS69E-T =, T6E ;=I-T VE-T>1E
/ll expense concerned wit* t*e establis*ment o0 eac* partner s*all be incl2ded
in t*e investment cost o0 t*e ;oint Vent2re 8ompan
Ar!"#e 1': =,,I8I/+ =PE1/TI-A D/TE
<

T*e ;oint Vent2re s*all be o@ciall establis*ed w*en t*e State 8ommittee 0or
8ooperation and Investment approves and iss2es t*e Investment license
Ar!"#e 10: DISS=+>TI=- & 7/-Q1>P8? & ,=18E 9/;E>1E
T*e ;oint Vent2re can be dissolved be0ore t*e termination o0 t*e contract in t*e
0ollowing cases<
& 7ot* parties agree and s2ggest t*e dissol2tion to be passed b t*e 7oard o0
9anagement
& T*e ;oint Vent2re is G2ridicall appraised as a banEr2pt compan
& =ne o0 t*e two parties does not want to contin2e as a Part in t*e ;oint Vent2re
and wants to trans0er its contrib2ted capital wit*o2t agreement o0 t*e ot*er
part b2t t*e State 8ommittee 0or 8o&operation and Investment permits t*e
dissol2tion
,ormalities o0 banEr2ptc declaration s*all be carried o2t in con0ormit wit*
appropriate international reg2lations agreed to b t*e two parties
In case o0 observance o0 Vietnamese& laws and reg2lations on banEr2ptc
declaration4 bot* parties agree to re0er t*is to Vietnam Economic /rbitration or
ot*er G2ridical organiDation in accordance wit* t*e +aw on ,oreign Investment
In case o0 ,orce 9aGe2re s2c* as eart*M2aEe4 storm4 Cood4 Kre4 war4 or an ot*er
2n0oreseen disaster w*ic* *as occ2rred beond t*e control o0 an part4 t*at
part s*all be disc*arged o0 its related commitments in t*is contract provided<
& T*e ,orce 9aGe2re is t*e proximate ca2se w*ic* obstr2cts or delas t*e
exec2tion o0 t*e contract
& T*at eac* part *as tried all possible meas2res to overcome s2c* occ2rrences
& T*at eac* part s*all immediatel4 a0ter s2c* occ2rrence4 in0orm t*e ot*er
part o0 t*e same and wit*in 20 das4 send t*e ot*er part a written notice
indicating t*e meas2res 2ndertaEen and t*e ca2se w*ic* prevents t*e
exec2tion o0 t*e 8ontract d2l conKrmed b t*e relevant a2t*orities at t*e place
w*ere t*e disaster occ2rs
Ar!"#e 1*: +I:>ID/TI=-
In case o0 liM2idation as stated in /rticle 1# o0 t*is contract4 t*e 7oard o0
9anagement s*all appoint a committee to exec2te t*e liM2idation
D2ring liM2idation4 t*e assets o0 t*e compan s*all Krst be 2sed to pa 0or
worEer)s salaries4 2npaid taxes4 d2e debts4 and liM2idation expenses4 t*e ot*er.
assets . s*all be s*ared b t*e two parties according to t*eir rate o0 capital
contrib2tion !bot* 0or proKts and losses$
T*e -ame o0 activities o0 t*e +iM2idation 8ommission s*all be stated in details in
t*e 8*arter o0 t*e ;oint Vent2re 8ompan
In case o0 banEr2ptc as stated in /rticle 1# o0 t*is contract4 t*e liM2idation s*all
be exec2ted in con0ormit wit* /rticle 13 o0 +aw on ,oreign Investment
O /rticle 1(< DISP>TE
>pon t*e approval o0. t*e State 8ommittee 0or 8ooperation and Investment4 t*e
;oint Vent2re 8ontract s*all become a G2ridical doc2ment w*ic* s*all bn
respected b bot* parties
/n one&sided contract2al termination is not valid.
/n disp2te between t*e two parties arising 0rom t*e exec2tion o0 t*is ;oint
Vent2re 8ontract s*all Krst be resolved t*ro2g* m2t2al cons2ltations and
amicable settlement proceedingsL i04 *owever4 t*e two parties 0ail to reac* an
agreement4 )t*e disp2te s*all be re0erred to t*e Singapore Economic /rbitration
/ll matters t*at are not provided 0or in t*is 8ontract b2t are necessar 0or t*e
carring o2t o0 t*e obGectives o0 t*e ;oint Vent2re 4
8ompan will be carried o2t b eac* part in accordance wit* t*e 8*arter o0 t*e
;oint&Vent2re 8ompan or&t*e applicable&Investment
+aw and Implementing Decree
T*is contract is made in 10 copies in Englis* and Vietnamese and comes into
eNects on t*e date o0 iss2ance o0 t*e Investment +icense4 Signed
on ...... ...... ...... ......13 ......
FOR THE VIETNAMESE PARTY: FOR FOREIGN PARTY
DEPARTMENT OF HOME TRADE HANOI IMEXPAN-PACIFIC INCORPORATED
DUONG DINH JOHNATHAN H. NGUYEN
DIRECTOR PRESIDENT
(page 121) C:#TRACT :R #: C:#TRACT
TE P!OBLE#
+f a disp/te arises a4o/t a )ontra)tF the %a5'ers for ea)h side st/d' the text to see if the
)ontra)t is a 4inding and enfor)ea4%e agreement or if there are %oopho%es: )an one side sa'
the V)ontra)tV is not 5orth the paper it is 5ritten onP Ea)h app%i)a4%e %a5 %oos at this
pro4%em different%'! Khat reasons are )ommon in internationa% )ases for de)iding that the
parties ha&e Vno )ontra)tVP
TE P!INCIPLE
9nder most %ega% s'stemsF a )ontra)t is enfor)ea4%e on%' if (a) the parties a)hie&e a
Vmeeting of mindsV thro/gh a pro)ess of offer and a))eptan)eF if (4) 4oth sides are )apa4%e
of entering a )ontra)tF and if ()) the p/rpose of the )ontra)t is %ega%! Theo h[/ h\t )B) h]
th^ng phBp %_F h`p abng )c tdnh )het rAng 4/=) )hf hi nAo (a) )B) 4>n agt ah`) si -th^ng
nhet _ )hd0 thjng J/a J/' trknh al nghm &A )hep nhnnF (4) )? hai 4>n )c nong %i) _ \t h`p
abngF &A ()) mp) ad)h )qa h`p abng h`p phBp! An odd t5ist of Ang%o-Ameri)an %a5 is that
the )ontra)t m/st gi&e 4oth sides rights and d/tiesUone-sided )ontra)ts are Vno )ontra)t!V
,/nt phBp Anh- Mr &^n ret phs) tgp )ho rtng h`p abng ph?i J/' amnh trB)h nhi]m &A
J/'ln %`i )ho )B) 4>n E h`p abng )hf )c m=t phda aha ra 4m xem %A -hjng ph?i h`p abng0!
IN #O!E DEPT
AD)E!BIAL CLA*SES OF CONCESSION
$5 4hough6 1lthough he is sick#
he goes to +ork.
No matter ho+ sick he is# he goes
to +ork.
7o+e/er sick he is# he goes to
+ork.
7o+e/er sick# he goes to +ork.
Sick as he is# he goes to +ork.
Despite6 *n spite of6
Not+ithstanding sickness# he goes
to +ork.
4hough6 1lthough sick# he goes to
+ork.
Tho/ghI A%tho/gh their %ines of reasoning are differentF
Continenta% %a5s and Ang%o-Ameri)an %a5s are 4oth
geared to Z
#o matter ho5 different their %ines of reasoning areF
Continenta% %a5s and Ang%o-Ameri)an %a5s are 4oth
geared to
Qo5e&er different their %ines of reasoning areF
Continenta% %a5s and Ang%o-Ameri)an %a5s are 4oth
geared to
Qo5e&er different their %ines of reasoningF Continenta%
%a5s and Ang%o-Ameri)an %a5s are 4oth geared to
$ifferent as their %ines of reasoning areF Continenta%
%a5s and Ang%o-Ameri)an %a5s are 4oth geared to
$espite different %ines of reasoningF Continenta% %a5s
and Ang%o-Ameri)an %a5s are 4oth geared to
Their %ines of reasoning 4eing differentF Continenta%
%a5s and Ang%o-Ameri)an %a5s are 4oth geared to Z
8**5 4hough he goes e/er0+here# he al+a0s remembers his home.
No matter +here he goes# he al+a0s remembers his home.
2here/er he goes# he al+a0s remembers his home.
Despite an0 place he goes to# he al+a0s remembers his home.
8***54hough he sa0s an0thing# he is a bad manager.
Qo5e&er different their %ines of reasoningF Continenta% %a5s and Ang%o-Ameri)an %a5s are
4oth geared to the needs of the internationa% 4/siness )omm/nit': different pro)ed/resF
different drafting st'%esF different agreementsU4/t a )ommon p/rpose andF in man' )asesF
a )ommon res/%t! $u th d/' )c hB) nha/F nhhng %/nt phBp )qa )hC/ v/ ,p) ama &A Anh-
Mr al/ nhwm txi aBp sng nh/ )[/ )qa )=ng abng doanh nghi]p J/^) t\: J/' trknh xyt xzF
)B)h di th?oF )B)h th{a th/nn t/' hB) nha/ nhhng mp) ad)h &|n nhh nha/ &A trong nhil/
trh}ng h`pF \t J/? )~ng nhh nha/!
This is parti)/%ar%' tr/e in de)iding the iss/e of )ontra)t or no )ontra)t! The Ang%o-Ameri)an
arg/es that a )ontra)t is an enfor)ea4%e agreementF and that an Vin&a%id )ontra)tV is
therefore a )ontradi)tion in termsT the Continenta% %a5'er has no tro/4%e 5ith the idea of an
in&a%id )ontra)t! 8or the exporterF it maes no differen)e if the %a5'er te%%s him he has Vno
)ontra)tV or an Vin&a%id )ontra)tVUeither 5a' he is in tro/4%e! Khat are the most %ie%'
)a/ses of s/)h an /n)omforta4%e sit/ationP
-
The #eet&+g ,- #&+./
A )ontra)t )omes a4o/t 5hen there is a meeting of mindsF 5hen one side sa's V+ mae
'o/ this offerV and the other side sa's V+ a))ept!V ./t sometimes there is a 5ritten
agreement and no Vmeeting of minds!V Qo5 )an that happenP
D(re//
+f + ho%d a pisto% to 'o/r head and for)e 'o/ to sign a )ontra)tF this is d/ressU/nd/e
press/re! A )ontra)t ne&er )ame into existen)e 4e)a/se there 5as no meeting of minds!
;imi%ar%'F if one part' has an ex)essi&e%' strong position (a monopo%' on the s/pp%' of a
&ita% ra5 materia%F for examp%e)F and if this part' /ses this position to di)tate gross%' /nfair
termsF the agreement is %ie%' to 4e r/%ed V/n)ons)iona4%e!V An /n)ons)iona4%e
agreement is no )ontra)t!
#&/ta0e a+. Fra(.
A mistae a4o/t the goods or a de%i4erate fra/d )an mean that there 5as no meeting of
minds! 8or examp%eF + )o/%d ha&e a )ontra)t 5ith 'o/ to 4/' the )argo of the Empress of
9erbena for N6DD! 9nfort/nate%' there are t5o ships of this name: + 5as se%%ing the )argo of
oneF and 'o/ 4e%ie&ed 'o/ 5ere 4/'ing the )argo of the other! :r if + tr' to )heat 'o/ 4'
sa'ing that the )argo )onsists of ne5 %eather Sa)ets 5hen the Sa)ets are /n/sed 4/t thirt'
'ears o%dUin ea)h )ase there 5as no meeting of minds and no )ontra)t!
Fa&1(re t, F,11,2 the !(1e/ ,- O--er a+. A''epta+'e
1 )ontra)t )omes into for)e 5hen an offer is made 4' one side and a))epted 4' the other!
Comp%ex r/%es go&ern this pro)ess and the' are often 4roen! Khat are these r/%esP
:ffer and A))eptan)e
A )ontra)t )omes into existen)e 5hen one part' (the offerer5 maes an offerF and another
part' (the offeree5 a))epts it!
An offer is not a%5a'sF in internationa% pra)ti)eF the first mo&e in forming a )ontra)t! :ften
the 4/'er first maes an inJ/ir' orF more forma%%'F iss/es a ReJ/est for Tender! +n %ine 5ith
this inJ/ir'F the exporter maes a tender or an offer# /s/a%%' the offer is open for a stated
period of time! +f the 4/'er reSe)ts the offerF it is )%ear%' deadT as soon as the 4/'er sa's
V#oFV the exnorter is no %onger 4o/nd 4' the offer!
#orma%%'F of )o/rseF 4/'ers do not sa' -#o0- the' mae a )o/nteroffer: -Go/ 5ant 6DD! +M%%
offer 'o/ 3DD!0 +n other 5ordsF -GesF if Z0 Khat is on the negotiating ta4%e no5P The
)o/nteroffer is a reSe)tionT in effe)t it i%%s the origina% offer! :n the ta4%e no5 is not an offer
to se%% for 6DD 4/t an offer to 4/' for 3DD! The exporter m/st no5 mae a )hoi)e: a))eptF
reSe)tF or mae another )o/nterofferF for examp%e: -,etMs sa' 1DD!0 The )')%e of offer and
)o/nteroffer )ontin/es /nti% one side sa's -+ a))ept0 or /nti% negotiations are 4roen off!
Khen a disp/te arises- espe)ia%%' if there is no 5ritten )ontra)t- %a5'ers s)r/tiniOe the
pro)ess of offer and a))eptan)eF tr'ing to dis)o&er the exa)t pointF if an'F at 5hi)h a
)ontra)t )ame into existen)e! ;in)e most negotiations dea% 5ith man' iss/es at the same
time- pri)eF pa'mentF de%i&er'F 5arrant'- de)iding if the parties rea%%' ha&e a )ontra)t andF if
soF on 5hat termsF )an 4e)ome an expensi&e nightmare! This is one main reason to p/t
e&er' agreement into 5riting and sign it!
TQE E#T+RE ARREEME#T C,A9;E
8or the Ang%o-Ameri)an exporterF signing a )ontra)t amo/nts to sa'ing e&er'thing 5e
dis)/ssed so far is no5 dead- this )ontra)t is the fina% form of o/r entire agreement! This
prin)ip%e deri&es from an an)ient r/%e of Eng%ish %a5 no5n as the (aro% E&iden)e R/%e!
8or the Continenta% exporter this is not so: a %etter that predates the )ontra)tF a memoF the
min/tes of a meeting- a%% might ha&e some 4earing on the )ontra)tF
C:#CE(T REV+EK/ .9TT:#E$ 9(
Ver4ena (aintshop maes spra'-painting eJ/ipment! +t se%%s a /nit )osting N22!DDD to
EsperanOa Respra'F a sma%% )ompan' that respra's 4/sses and tra)s! $e%i&er' (8:.)
taes p%a)e on 3rd A/g/st %""!. The ma)hine is inspe)ted in EsperanOa on 11
th
;eptem4er
"DD4! :n 1D
th
7an/ar'F EsperanOa Respra' notifies the exporter that the )ompressor in the
spra'ing /nit has fai%edF and that the ma)hine )annot 4e /sed! Ver4ena (aintshop sends a
rep%a)ement )ompressor 4' air: it arri&es on 2
th
8e4r/ar'F "DD2. :n 13
th
;eptem4er "DD2F
Esperanra Respra' notifies the exporter that the )ompressor fai%ed for a se)ond tirne on
"D
th
A/g/st and ass for a f/rther rep%a)ement! Ver4ena (aintshop ref/ses!
;t/d' the $efe)ts ,ia4i%it' pro&ision 4e%o5! Khat arg/ments are the t5o t+o sides %ie%' to
p/t for5ard in maing their )asesP
Defe,t! Li"4i#it& Pe%io
The $efe)ts ,ia4i%it' (eriod sha%% 4e a period of six months!
+f an' defe)t o))/rs d/ring the $efe)ts ,ia4i%it' (eriodF the ./'er sha%% forth5ith inform the
;e%%er in 5riting the detai%s of the defe)t!
The ;e%%er sha%% 4e responsi4%e for maing good 5ith a%% possi4%e speed an' defe)t as
notified 5hi)h arises from defe)ti&e materia%sF 5ormanship or design!
The pro&ision of this )%a/se sha%% app%' to an' goods repairedF rep%a)ed or other5ise
made good 4' the ;e%%erF 4/t not so as to extend the $efe)ts ,ia4i%it' (eriod for more
than t5e%&e months from the )ommen)ement date of origina% defe)ts %ia4i%it' period!
1! !Arg/ments %ie%' to 4e /sed 4' EspsranOa Respra':
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZZZZZZZZZ!
"! Arg/ments %ie%' to 4e /sed 4' Ver4ena (aintshop:
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZZZZZZZZZ!
3! (oints reJ/iring 4etter reg/%ation in this defe)ts %ia4i%it' pro&ision:
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZZZZZZZZZ!
1! Esp)ranOa Respra' 5i%% arg/e that the )ompressor is o4&io/s%' a poor%' made
item sin)e it fai%ed t5i)eUthere is pro4a4%' a defe)t in design! 8/rther it 5i%% sa'
that the exporterWs %ia4i%it' for defe)ts extends to a%% rep%a)ed items! The se)ond
fai%/re o))/rredUand 5as notifiedU5ithin the maxim/m agreed defe)ts %ia4i%it'
periodF i!e!F t5e%&e months from the )ommen)ement of the period!
"! Ver4ena (aintshop has t5o arg/ments: first%' there 5as a de%a' of fo/r 5ees
4et5een the se)ond fai%/re and the reJ/ired notifi)ation: this is not notifi)ation
Vforth5ith:V the fai%/re to offer time%' notifi)ation )an)e%s the se%%erWs d/t' to )/re the
defe)tT ;e)ond%'F the defe)ts %ia4i%it' period 4egan 5ith de%i&er' (3
rd
A/g/st "DD4)T
the fai%/re of the )ompressor th/s o))/rred 5hen it 5as no %onger /nder 5arrant'!
3! The )%a/se 5o/%d 4e )%earer if it stated 5hen the defe)ts %ia4i%it' period 4egan!
9nder most app%i)a4%e %a5s the period 4egins 5ith de%i&er'! More exa)t spe)ifi)ation
of the notifi)ation period is not )ommon or ne)essar'!

C:#CE(T REV+EK: KQ: CQ::;E;P
The defe)ts %ia4i%it' pro&ision 4e%o5 is taen from a set of genera% )onditions in )ommon
/se 4' Chinese )ompanies! Read the ans5er the J/estions
The ;e%%er 5arrants that goods are made of the 4est materia%sF 5ith first )%ass
5ormanshipF and )omp%' in a%% respe)ts 5ith the spe)ifi)ations gi&en in Annex
.! The ;e%%er 5arrants that the goods 5hen )orre)t%' mo/nted and proper%'
operated and maintainedF sha%% gi&e appropriate performan)e for a period of
t5e%&e months!
+f a defe)t in materia%sF 5ormanship or designF or an' dis)repan)' 5ith
spe)ifi)ations )omes to %ight d/ring the 5arrant' periodF the ;e%%er sha%% at his
o5n )ost satisf' the )%aimF s/4Se)t to the agreement of the ./'er in one of the
fo%%o5ing 5a's:
a! Agree to the reSe)tion of the goods and ref/nd to the ./'er the &a%/e of the goods th/s
reSe)tedT
4! Red/)e the pri)e of the goods a))ording to the degree of inferiorit'F extent of damageF or
amo/nt of %oss s/ffered 4' the 4/'erT
)! Rep%a)e the defe)ti&e goods 5ith ne5 goods 5hi)h )onform to the J/a%it' and
performan)e gi&en in Annex .T
d! Repair the defe)ti&e goods to 4ring them in )onformit' 5ith the J/a%it' and performan)e
spe)ifi)ations gi&en in Annex .T
e! A%%o5 the ./'er or a third part' appointed 4' the ./'er to repair the defe)ti&e goods and
to 4ring them in )onformit' 5ith the J/a%it' and performan)e spe)ifi)ations gi&en in Annex .
at ;e%%erMs ris and )ost!
1! Are these genera% )onditions (onditions of Sale or (onditions of PurchaseP
;A,E(9RCQA;E
"! +f there is a defe)tF 5ho )hooses the method of )/reP
.9GER EL(:RTER
3! +s this a 5arrant' of freedom from defects on deli/er0 or a +arrant0 of durabilit0P
8REE$:M 8R:M $E8ECT; $9RA.+,+TG
1! Conditions of (/r)hase! (;ee ans5er to J/estion ")
"! The exporter proposes a methodF 4/t the 4/'er m/st agree to it! Th/s the
4/'er is in )ontro%F
3! $/ra4i%it'! Another sign that 5e are dea%ing 5ith )onditions of p/r)hase!
C:#CE(T REV+EK: KQ: (AG;P
Ver4ena Medi)a% maes hospita% 4eds and other hospita% f/rnit/re! +t exports 4D 4eds to
;o/th Centra% Qospita% in Esp)ranOa Cit'! The defe)ts %ia4i%it' pro&ision in the )ontra)t
in)%/des this 5ording:
4he Seller shall indemnif0 and hold harmless the ;u0er against an0 loss or damage
+hether direct or indirect suffered b0 the ;u0er as the result of defecti/e or fault0
goods deli/ered b0 the Seller.
Ass/me that the )onira)t is s/4Se)t to the %a5 of Esp)ranOa 5hi)h is mode%%ed on 9!;! %a5!
$/ring the defe)ts %ia4i%it' periodF one of the 4eds )o%%apses 5ith /nfort/nate res/%ts:
1! The 4ed itse%f is /n/sa4%e and m/st 4e rep%a)edT
"! The patient 5ho 5as in the 4ed is inS/redF 5ith extra medi)a% )osts of N2FDDDT
3! The inS/red patientF a ri)h po%iti)ianF threatens the hospita% 5ith a %a5s/it for his
Vpain and s/fferingVUthe! hospita% pa's the patient N6FDDD to a&oid the %a5s/itT
4! Qospita% eJ/ipment aro/nd the 4ed is damagedUthe eJ/ipment )ost N4FDDDT
2! The 5ard 5here the 4ed 5as sit/ated is a pri&ate 5ardUit )annot 4e /sed for 3
da's 5ith a %oss to the hospita% of N3!DDD:
3! T5o order%ies at the hospita% start a fight o&er 5ho 4roe the 4edUone of them is
hospita%iOed at a )ost of N2FDDDT
<! $/ring the fightF eJ/ipment is smashed at a )ost of N1FDDD!
Khi)h )osts m/st Ver4ena Medi)a% most pro4a4%' pa'P
1. 4. (. =.
"! 4! 3!
:
1! Ges 3 (ossi4%' 2! Ges <! #o
"! Ges 4 Ges 3! #o

;9MMARG: Khat Go/ ;ho/%d Hno5
1! The p/rpose of the defe)ts %ia4i%it' pro&ision i! to a%%o5 the exporter to )/re defe)ts in
de%i&ered goods: the pro&isionWm/st therefore exp%ain the )orre)ti&e a)tion he m/st tae!
"! The norma% options are to repairF to rep%a)eF to a%%o5 red/)tion in the pri)e of the
goodsF a%%o5 ret/rn of the goodsF or to a%%o5 the 4/'er to repair the defe)t at the
exporterWs expense!
3! The exporter %ies to ha&e f/%% dis)retion o&er 5hat )orre)ti&e a)tion he taesT 4/'ersF
ho5e&erF resist this!
4! The exporter /s/a%%'F tho/gh not a%5a'sF pa's for )/ring defe)ts!
2! The )onseJ/en)es of a defe)t )an 4e )ost%'T the pani)s often negotiate at %ength to
de)ide 5ho pa's for )onseJ/entia% %oss or damage!
C:#CE(T REV+EK/ .9TT:#E$ 9(
Ver4ena (aintshop maes spra'-painting eJ/ipment! +t se%%s a /nit )osting N22!DDD to
EsperanOa Respra'F a sma%% )ompan' that respra's 4/sses and tra)s! $e%i&er' (8:.)
taes p%a)e on 3rd A/g/st %""!. The ma)hine is inspe)ted in EsperanOa on 11
th
;eptem4er
"DD4! :n 1D
th
7an/ar'F EsperanOa Respra' notifies the exporter that the )ompressor in the
spra'ing /nit has fai%edF and that the ma)hine )annot 4e /sed! Ver4ena (aintshop sends a
rep%a)ement )ompressor 4' air: it arri&es on 2
th
8e4r/ar'F "DD2. :n 13
th
;eptem4er "DD2F
Esperanra Respra' notifies the exporter that the )ompressor fai%ed for a se)ond tirne on
"D
th
A/g/st and ass for a f/rther rep%a)ement! Ver4ena (aintshop ref/ses!
;t/d' the $efe)ts ,ia4i%it' pro&ision 4e%o5! Khat arg/ments are the t5o t+o sides %ie%' to
p/t for5ard in maing their )asesP
Defe,t! Li"4i#it& Pe%io
The $efe)ts ,ia4i%it' (eriod sha%% 4e a period of six months!
+f an' defe)t o))/rs d/ring the $efe)ts ,ia4i%it' (eriodF the ./'er sha%% forth5ith inform the
;e%%er in 5riting the detai%s of the defe)t!
The ;e%%er sha%% 4e responsi4%e for maing good 5ith a%% possi4%e speed an' defe)t as
notified 5hi)h arises from defe)ti&e materia%sF 5ormanship or design!
The pro&ision of this )%a/se sha%% app%' to an' goods repairedF rep%a)ed or other5ise
made good 4' the ;e%%erF 4/t not so as to extend the $efe)ts ,ia4i%it' (eriod for more
than t5e%&e months from the )ommen)ement date of origina% defe)ts %ia4i%it' period!
1! !Arg/ments %ie%' to 4e /sed 4' EspsranOa Respra':
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZZZZZZZZZ!
"! Arg/ments %ie%' to 4e /sed 4' Ver4ena (aintshop:
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZZZZZZZZZ!
3! (oints reJ/iring 4etter reg/%ation in this defe)ts %ia4i%it' pro&ision:
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZZZZZZZZZ!
1! Esp)ranOa Respra' 5i%% arg/e that the )ompressor is o4&io/s%' a poor%' made
item sin)e it fai%ed t5i)eUthere is pro4a4%' a defe)t in design! 8/rther it 5i%% sa'
that the exporterWs %ia4i%it' for defe)ts extends to a%% rep%a)ed items! The se)ond
fai%/re o))/rredUand 5as notifiedU5ithin the maxim/m agreed defe)ts %ia4i%it'
periodF i!e!F t5e%&e months from the )ommen)ement of the period!
"! Ver4ena (aintshop has t5o arg/ments: first%' there 5as a de%a' of fo/r 5ees
4et5een the se)ond fai%/re and the reJ/ired notifi)ation: this is not notifi)ation
Vforth5ith:V the fai%/re to offer time%' notifi)ation )an)e%s the se%%erWs d/t' to )/re the
defe)tT ;e)ond%'F the defe)ts %ia4i%it' period 4egan 5ith de%i&er' (3
rd
A/g/st "DD4)T
the fai%/re of the )ompressor th/s o))/rred 5hen it 5as no %onger /nder 5arrant'!
3! The )%a/se 5o/%d 4e )%earer if it stated 5hen the defe)ts %ia4i%it' period 4egan!
9nder most app%i)a4%e %a5s the period 4egins 5ith de%i&er'! More exa)t spe)ifi)ation
of the notifi)ation period is not )ommon or ne)essar'!

C:#CE(T REV+EK: KQ: CQ::;E;P
The defe)ts %ia4i%it' pro&ision 4e%o5 is taen from a set of genera% )onditions in )ommon
/se 4' Chinese )ompanies! Read the ans5er the J/estions
The ;e%%er 5arrants that goods are made of the 4est materia%sF 5ith first )%ass
5ormanshipF and )omp%' in a%% respe)ts 5ith the spe)ifi)ations gi&en in Annex
.! The ;e%%er 5arrants that the goods 5hen )orre)t%' mo/nted and proper%'
operated and maintainedF sha%% gi&e appropriate performan)e for a period of
t5e%&e months!
+f a defe)t in materia%sF 5ormanship or designF or an' dis)repan)' 5ith
spe)ifi)ations )omes to %ight d/ring the 5arrant' periodF the ;e%%er sha%% at his
o5n )ost satisf' the )%aimF s/4Se)t to the agreement of the ./'er in one of the
fo%%o5ing 5a's:
a! Agree to the reSe)tion of the goods and ref/nd to the ./'er the &a%/e of the goods th/s
reSe)tedT
4! Red/)e the pri)e of the goods a))ording to the degree of inferiorit'F extent of damageF or
amo/nt of %oss s/ffered 4' the 4/'erT
)! Rep%a)e the defe)ti&e goods 5ith ne5 goods 5hi)h )onform to the J/a%it' and
performan)e gi&en in Annex .T
d! Repair the defe)ti&e goods to 4ring them in )onformit' 5ith the J/a%it' and performan)e
spe)ifi)ations gi&en in Annex .T
e! A%%o5 the ./'er or a third part' appointed 4' the ./'er to repair the defe)ti&e goods and
to 4ring them in )onformit' 5ith the J/a%it' and performan)e spe)ifi)ations gi&en in Annex .
at ;e%%erMs ris and )ost!
1! Are these genera% )onditions (onditions of Sale or (onditions of PurchaseP
;A,E(9RCQA;E
"! +f there is a defe)tF 5ho )hooses the method of )/reP
.9GER EL(:RTER
3! +s this a 5arrant' of freedom from defects on deli/er0 or a +arrant0 of durabilit0P
8REE$:M 8R:M $E8ECT; $9RA.+,+TG
1! Conditions of (/r)hase! (;ee ans5er to J/estion ")
"! The exporter proposes a methodF 4/t the 4/'er m/st agree to it! Th/s the
4/'er is in )ontro%F
3! $/ra4i%it'! Another sign that 5e are dea%ing 5ith )onditions of p/r)hase!
C:#CE(T REV+EK: KQ: (AG;P
Ver4ena Medi)a% maes hospita% 4eds and other hospita% f/rnit/re! +t exports 4D 4eds to
;o/th Centra% Qospita% in Esp)ranOa Cit'! The defe)ts %ia4i%it' pro&ision in the )ontra)t
in)%/des this 5ording:
4he Seller shall indemnif0 and hold harmless the ;u0er against an0 loss or damage
+hether direct or indirect suffered b0 the ;u0er as the result of defecti/e or fault0
goods deli/ered b0 the Seller.
Ass/me that the )onira)t is s/4Se)t to the %a5 of Esp)ranOa 5hi)h is mode%%ed on 9!;! %a5!
$/ring the defe)ts %ia4i%it' periodF one of the 4eds )o%%apses 5ith /nfort/nate res/%ts:
1! The 4ed itse%f is /n/sa4%e and m/st 4e rep%a)edT
"! The patient 5ho 5as in the 4ed is inS/redF 5ith extra medi)a% )osts of N2FDDDT
3! The inS/red patientF a ri)h po%iti)ianF threatens the hospita% 5ith a %a5s/it for his
Vpain and s/fferingVUthe! hospita% pa's the patient N6FDDD to a&oid the %a5s/itT
4! Qospita% eJ/ipment aro/nd the 4ed is damagedUthe eJ/ipment )ost N4FDDDT
2! The 5ard 5here the 4ed 5as sit/ated is a pri&ate 5ardUit )annot 4e /sed for 3
da's 5ith a %oss to the hospita% of N3!DDD:
3! T5o order%ies at the hospita% start a fight o&er 5ho 4roe the 4edUone of them is
hospita%iOed at a )ost of N2FDDDT
<! $/ring the fightF eJ/ipment is smashed at a )ost of N1FDDD!
Khi)h )osts m/st Ver4ena Medi)a% most pro4a4%' pa'P
1. 4. (. =.
"! 4! 3!
:
1! Ges 3 (ossi4%' 2! Ges <! #o
"! Ges 4 Ges 3! #o
((age 4") TRA#;(:RT
TQE (R:.,EM
8or the exporterF transportation has t5o aspe)ts: the ph'si)a% safet' of goods E 5hi)h
means appropriate pa)aging and )orre)t maring E and )orre)t do)/mentation! 9n%ess the
shipping do)/ments are in perfe)t orderF prompt pa'ment /nder a %etter of )redit is diffi)/%t
or impossi4%e! Khat are the dangersP
TQE (R+#C+(,E
The parties sho/%d state in their )ontra)t 5hat pa)aging sho/%d 4ear! The exporter m/st
fo%%o5 the agreement s)r/p/%o/s%' or pa'ment ma' 4e de%a'ed! The exporter sho/%d ens/re
that the shipping do)/ments )orrespond exa)t%' 5ith the )onditions of the %etter of )redit
and that the 4i%% of %adding is -)%eanF0 other5iseF againF pa'ment )an 4e serio/s%' de%a'ed!

((age 136) TQE C:#TRACT A; TQE E#T+RE ARREEME#T
TQE (R:.,EM
An an)ient r/%e of Ang%o-Ameri)an %a5 states that the fina% 5ritten &ersion of the )ontra)t
rep%a)es a%% pre&io/s agreements 4et5een the parties! Khat imp%i)ations does this r/%e
ha&e for the exporterP
TQE (R+#C+(,E
Most internationa% )ontra)ts E 5hate&er %ega% s'stem the' adopt E in)%/de an -entire
agreement pro&ision! -This )%a/se has important res/%ts: the 4a)gro/nd of the )ontra)t
m/st 4e esta4%ished 5ithin the )ontra)t itse%fF important %etters and memoranda m/st 4e
%isted as -)ontra)t do)/mentsF0 and definitions p%a' an important part in )ontra)t drafting!
H|+ hct %R% hU' S]n2 >+% tc 7 %ho d S_ -Q h` thpn2 'hR' -e nQo S STU% Zn drn2 Sv+ 'hX! ,ao
2]$ S!v+ .hoXn 5hU' S]n2 hoQn %hnh.? !v+ .hoXn nQy %_ tR% SPn2 hct sx% >+an t*~n2B ,! %Xnh
%wa hU' S]n2 'hX! STU% nN+ * t*on2 hU' S]n21 %R% thT ty1 $e$o 'hX! STU% -!`t .N -Q 5%hxn2 ty %wa
hU' S]n2?1 Q S\nh n2ha %n2 *ft >+an t*~n2 .h! sosn thXo.
+# M:RE $E(TQ
Khen an exporter and a 4/'er sign a )ontra)tF are the' simp%' adding the fina% %in to a
)hain of agreementsP :r are the' p/tting into 5ords a fina% and definiti&e &ersion of
e&er'thing agreed so farP The Continenta% and Ang%o-Ameri)an s'stems differ 5ide%' in
their ans5er to these J/estions!
TQE KQEREA; REC+TA,: TQE .ACHRR:9#$ :8 TQE C:#TRACT
+n most exporter dea%sF the )ontra)t is the -entire agreement!0 9nfort/nate%'F ho5e&erF the
text of a )ontra)t se%dom ans5ers important 4a)gro/nd J/estions: Kh' did the parties
sign the )ontra)t in the first p%a)eP Khat made the dea% attra)ti&eP Qo5 %ong had the
parties no5n ea)h otherP Khat f/t/re 4/siness did the' hope forP And so on! +f a
disp/te arisesF the S/dge m/st as s/)h J/estions in order to /nderstand the )ontra)t
f/%%'T often the parties gi&e different ans5ers! Qo5 )an the )o/rt esta4%ish the tr/thP +f the
)ontra)t is the entire agreementF then ear%ier %etters and do)/ments )annot 4e /sed as
e&iden)e! To o&er)ome this /n)ertaint'F %a5'ers 5rite the ans5ers to 4a)gro/nd
J/estions into the )ontra)t! Thro/gh the 5hereas-re)ita%! Contra)ts often 4egin:
TQ+; (R:C9REME#T C:#TRACT
4et5een
The ;t'ropa Compan' of #onamia
and
Ver4ena (a)aging ,td! :f Ver4ena
Kitnesseth that
KQEREA; the parties ha&e for man' 'ears s/))essf/%%' traded together
A#$ KQEREA; ;t'ropa has re)ent%' de&e%oped 4iodegrada4%e st'rofoam
pa)aging
The parties here4' agree ZZ!!
The 5ord -5hereas0 means -4e)a/se0 or -)onsidering that0T in other 5ords 5hereas-)%a/ses
are not pro&isionsF promises or )onditionsUthe' are explanations. 1 t'pi)a% 5hereas-re)ita%
)ontains man' t'pes of 4a)gro/nd information! An examp%e from a te)hno%og' a)J/isition
)ontra)t:
- KQEREA; the parties ha&e s/))essf/%%' )ooperated in a n/m4er of proSe)ts in the
Rep/4%i) of Ver4ena d/ring the %ast! ten 'earsT 8;ackground of (ollaboration5
- KQEREA; the ;/pp%ier has 5ide experien)e in the s/pp%' of e%e)troni) prod/)ts
for /se in tropi)a% )onditionsT 8Expertise of the parties5
- KQEREA; the parties )on)%/ded on "1 Ma' "DD< a Memorand/m of
9nderstanding and intend to de&e%op prod/)ts for Ver4enaT 8Pre/ious 1greements5
- KQEREA; the ;/pp%ier has de&e%oped and patented an e%e)troni) re%a' /nder the
registered trade-name VQair TriggerVT 8)eference to a Patent5
- KQEREA; 4oth parties are interested in introd/)ing this ne5 te)hno%og' into the
East Asian regionT 8'utual *nterest5
- KQEREA; the p/r)haser 5ishes to in)orporate the %atest re%a'-man/fa)t/ring
te)hno%og' in its o5n prod/)tsT 8<oals of the Parties5
- A#$ KQEREA; the go&ernment of the Rep/4%i) of Ver4ena a)ti&e%' s/pports the
introd/)tion of pioneer te)hno%og' 8Economic Support 1/ailable5
+t is here4' agreed that ZZ
Contra)ts for the sa%e of goods se%dom )ontain so m/)h informationF 4/t the p/rpose of an'
re)ita% is the same: if a disp/te arisesF the re)ita% a%%o5 the )o/rt to dis)o&er the rea%
meaning of the )ontra)t thro/gh an /nderstanding of the expectations of the parties 5hen
the' signed it!
;ometimes the exporter is tempted to treat the re)ita% as a )han)e to promote his si%%s
and the ex)e%%en)e of his prod/)ts! This is a mistae! +f the )ontra)t gets into tro/4%eF the
4/'er 5i%% ha&e a V4ig sti)V 5ith 5hi)h to 4eat the exporter VGo/ to%d me 'o/ 5ere the
4est U and + a)ted on that 4e%ief!V +f 4ig )%aims are in the re)ita% in 4%a)-and-5nite the
exporter is trapped!
+n a )ontra)t 5ritten /nder a Continenta% ,a5F a re)ita% (or Vpream4%eV) is /sef/%Uit
pre&ents mis/nderstandingU4/t it is not essentia%! Continenta% %a5'ers often a&oid the
)omp%i)ated grammar of the 5hereas-)%a/seT the' prefer simp%e senten)es /nder the
heading Preamble. The %ega% res/%t isF of )o/rseF exa)t%' the same!
$E8+#+T+:#;
Another res/%t of the entire agreement pro&ision is the need for a definitions se)tion!
Man' terms are dis)/ssed d/ring negotiations- faxes and %etters and%ie%' to 4e
ex)hanged asing -Khat exa)t%' do 'o/ mean 4'ZP0
+t is )ommon pra)ti)e to gro/p a%% definitions in a se)tion of their o5n near the 4eginning
of the )ontra)t! E&er' 5ord that the t5o sides dis)/ss d/ring their negotiations is %ie%' to
reJ/ire a definition!
C:#CE(T REV+EK 3: MAH+#R C,A+M;
Ver4ena ,eather maes %eather )arr'ing )ases for )amerasF %ap-%op )omp/ters and other
hi-te)h persona% eJ/ipment! +t has s/))essf/%%' exported one )onsignment of its prod/)ts to
7apanF 4/t it has other5ise so%d most%' in the %o)a% maret! A 4/'er in the 9nited ;tates is
interested in maing a %arge p/r)hase! $/ring the negotiationsF the Ameri)an 4/'er
mentions the 5hereas-re)ita% and offers the 5ording he 5ants to in)%/de in the )ontra)t!
Read it and then ans5er the J/estions!
Khereas Ver4ena ,eather has a high%' trained 5orfor)e and the most modern
%eather-maing ma)hiner'T
And 5hereas Ver4ena ,eather has 5ide experien)e is s/pp%'ing prod/)ts to a%% parts
of the 5or%dT ! !
And 5hereas Ver4ena ,eather is f/%%' fami%iar 5ith reg/%ations regarding import
of %eather goods into the 9nited ;tatesT
The parties nere4' agree!!!
1 Kh' does the Ameri)an 4/'er 5ant this 5ording in the re)ita%P
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
"! Kh' might s/)h high )%aims 4e dangero/s for Ver4ena ,eatherP
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
3! $oes this 5hereas-re)ita% ha&e an' ad&antages for Ver4ena ,eatherP
GE; #:
1! The 5ording 5i%% he%p the 4/'er if the prod/)ts r/n into te)hni)a% or reg/%ator'
pro4%ems in the 9nited ;tates! The exporter )annot p%ead ignoran)e or inexperien)e!
"! An experien)ed exporter 5i%% a%5a's r/n into tro/4%e in ne5 maret! +f a disp/te
arisesF the S/dge might 5e%% tae this fa)t into a))o/nt in de)iding the )ase- 4/t not if
this 5ording is in the re)ita%!
3! #o!
C:#CE(T REV+EK ": Top (riorit'
The )%a/se 4e%o5 is taen from a set of tender do)/ments for the s/pp%' (and insta%%ation)
of a %ighting s'stem! +t has three o4&io/s 5eanesses! Khat are the'P
=.(ontract Documents. means collecti/el0 the completed 4ender Documents +ith
possible supplements# the (ontract 1greement# 4ender Dra+ings# the Notice of
1+ard# the Performance ;ond# the <uarantee for 1d/ance Pa0ment# the Form of
)etention <uarantee# the (op0 of Polic0 for 4hird Part0 *nsurance# the >etter of
Po+er of 1ttorne0 and the ?oint 9enture 1greement 8if an05 +ith annexures and
appendices included therein and an0 additions# supplemental agreements# change
orders and extra +ork orders 8if an05.
1! ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
"! ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
3! ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
1! The %ist has no order of pre)eden)e: if there is a )onf!i)t among the do)/mentsF
no4od' 5i%% no5 5hi)h pre&ai%s!
"! The %ist is )are%ess%' p/t togetherUit in)%/des an'thing that might 4e importantT it
sho/%d 4e )/t 4a) to essentia%s!
3! .' /sing the 5ords Vif an'FV the %ist in)%/des do)/ments 5hi)h ma' not e&en exist!

C:#CE(T REV+EK 3: Qide and ;ee
,et /s sta' 5ith the %eather goods )ontra)t from Con)ept Re&ie5 1F Maing C%aims! $/ring
negotiations the t5o sides spend a great dea% of %ime dis)/ssing the t'pe of %eather to 4e
/sed! :ne prod/)tF as it is agreedF is to 4e made of Vante%ope hideV and the spe)ifi)ations
in the )ontra)t in)%/de that phrase! ./t 5hat is an ante%opeP There is a %ong ex)hange of
faxes on this s/4Se)tT fina%%' the t5o sides agree a %ist of 4reeds that are Vante%opes as far
as the )ontra)t is )on)erned! The %ist is importantF and it is signed 4' 4oth sides! After this
the )ontra)t is signed!
Re%'ing on this signed %istF Ver4ena ,eather /ses gaOe%%e sin (5hi)h is in)%/ded in the %ist)
for some prod/)ts! The Ameri)an 4/'er o4Se)ts and tries to reSe)t the de%i&ered goods! The
disp/te goes 4efore a S/dge in Ca%ifornia!
Khat are the irnportant )onsiderations in de)iding 5ho is rightP
1! ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
"! ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
3! ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!!
The essentia% J/estion is this: is the %ist of 4reeds part of the )ontra)t or notP To
de)ide thisF 5e m/st first as if the %ist of 4reeds is mentioned in the )ontra)t as a
)ontra)t do)/ment! +f it isF then it is pan of the )ontra)t and enfor)ea4%e! +f it is not
mentioned as a )ontra)t do)/mentF then 5e m/st as if the )ontra)t )ontains an
entire agreement pro&ision orF fai%ing thatF if the app%i)a4%e %a5 ass/mes that the
)ontra)t is the entire agreement! +fUfor 5hate&er reasonUthe )ontra)t is the entire
agreementF then the %ist of 4reedsF 5hi)h 5as agreed 4efore the )ontra)t 5as
signedF has no &a%idit'!
;9MMARG: Khat 'o/ ;ho/%d Hno5
1! The Ang%o-Ameri)an )ontra)t isF traditiona%%'F the entire agreement! To a&oid
)onf/sionF most internationa% )ontra)ts )ontain an Ventire agreementV )%a/se (re)stating
this position!
"! The entire agreement )%a/se means that a%% do)/ments that predate the )on)ra)t
4e)ome in&a%id 5hen the )ontra)t is signed!
3! :ne res/%t is that the 4a)gro/nd to the )ontra)tUoften needed 4' a )o/rt to
interpret the )ontra)tUis pro&ided in the form of a 5hereas-re)ita%!
4! An' important do)/ments (te%%ersF memo rand-/rnsF and so on) that predate the )ontra)t
are %isted in the )ontra)t as V)ontra)t do)/ments!V ;/)h do)/ments m/st 4e gi&en an order
of seniorit' in )ase of )ontradi)tions!
2! $efinitions of terms agreed d/ring negotiations are in)%/ded in a definitions se)tions
in the )on)ra)t!
TERM+#AT+:#
-Termination0 o))/rs 5hen either part' p/rs/ing po5er )reated 4' agreement or %a5 p/ts
an end to the )ontra)t other5ise than for its 4rea)h! Th/s r/ns Ameri)aMs 9CC! +f the t5o
sides agree in the )ontra)t that one of the parties ma'F /nder )ertain )ir)/mstan)esF end
the )ontra)tF then this is an a)t to terminate! +n pra)ti)eF there are t5o inds of
termination: termination for )on&enien)e and termination for defa/%t!
4ermination for con/enience o))/rs 5hen one part' (/s/a%%' the 4/'er) simp%' de)ides to
drop the )ontra)t! #o r/%e is reJ/ired! This is /n/s/a% in a standard export )ontra)tF 4/t is
)ommon in time-frame )ontra)ts! (A time-frame )ontra)t is one 5hi)h a%%o5s the 4/'er to
order items at his dis)retion o&er a %ong period of time- t5o 'ears perhaps!)
4ermination for default o))/rs 5hen the )ontra)t sees )ertain defa/%ts 5hi)h a%%o5 one
side (/s/a%%' the 4/'er to terminateF Contra)ts 5ithin an Ang%o-Ameri)an frame5or tend
to stip/%ate that on termination (for 5hate&er reason)F the -part' terminated0 has the right
to 4e paid for a%% s/pp%ies or ser&i)es )orre)t%' de%i&ered! Contra)ts 5ithin the Continenta%
frame5or tend to omit this pro&isionF re%'ing on the app%i)a4%e %a5 to reso%&e the iss/e!
To a&oid an' /n)ertaint'F termination )%a/ses sho/%d in)%/de s/)h 5ording as:
*n the e/ent of termination for +hate/er reason# the Seller shall be entitled to
recei/e full pa0ment for all goods and ser/ices deli/ered b0 the Seller at the date
of termination.
An examp%eF thenF from an Ameri)an time-frame )ontra)t:
Termination for $efa/%t
The ./'er ma' 4' 5ritten noti)e of. defa/%t to the ;e%%erF terminate the 5ho%e or
an' part o this )ontra)t in an' one of the fo%%o5ing )ir)/mstan)es:
(i) +f the ;e%%er fai%s to mae de%i&er' of the Roods 5ithin the time spe)ified
hereinT
(ii) +f the ;e%%er fai%s to perform an' of the other pro&isions of this )ontra)tF or so fai%s
to mae progress as to endanger performan)e of this )ontra)t in a))ordan)e 5ith its
termsF and in either of these t5o )ir)/mstan)es does not )/re s/)h fai%/re 5ithin a
period of 1D da's!
CA#CE,,AT+:#
Khen one part' 4rea)hes a )ontra)tF the other has the right to demand cancellation of the
)ontra)t!WV Can)e%%ationW o))/rs 5hen either part' p/ts an end to the )ontra)t for
4rea)h!#ote the differen)e 4et5een termination and )an)e%%ation! The )ontra)t is
terminated /nder a pro&ision of the )ontra)t: a )ontra)t is cancelled 5hen one side has
4rea)hed and the other simp%' ref/ses to pro)eed!
$o)s e&er' 4rea)h a%%o5 )an)e%%ation 4' the other part'P C%ear%' not! The %a5 d/es
e&er'thing it )an to enfor)e )ontra)ts- )an)e%%ation on tri&ia% gro/nds maes no %ega%
sense! A))ording%'F most %a5s see a 4rea)h as either f/ndamenta% or noi f/ndamenta%! A
f/ndamenta% 4rea)h goes WWto the heart of the )ontra)tV and a%%o5s the other side V to sa'
UVEno/gh! The )ontra)t is o&er!V Qo5 )an 'o/ de)ide 5hat is and 5hat is not
Vf/ndamenta% 4rea)hVP ;ome )ases are eas' to de)ideF 4/t there is a %arge gra' areaU
/nder e&er' 5e%%-esta4%ished %a5F the )o/rts are freJ/ent%' !as)d to mae de)isions on
hard )ases!
Khen a )ontra)t is )an)e%%edF a pa'ment pro4%em arises: sho/%d the part' in 4rea)h
re)ei&e )ompensation for d/ties performed so farP Co/rts 5or%d5ide find it diffi)/%t to
esta4%ish a prin)ip%e on thisF and S/dgment is /s/a%%' on a )ase-4'-)ase 4asis! #at/ra%%'
the part' in 4rea)h has a 5ea )ase: e&en soF there is some )han)e of re)o&ering 5hat
has gen/ine%' 4een earned!
RE;C+;;+:#
Termination and )an)e%%ation are 4oth one-sided pro)ed/res! Khen the t5o parties agree to
end a )ontra)tF the genera%%' /sed term is rescission. ,eiWs sa'F for examp%eF that a s/pp%ier
of e%e)tri) )a4%e has diffi)/%t' s/pp%'ing the J/a%it' his )/stomer reJ/iresF and the )/stomer
has mean5hi%e fo/nd a )heaper s/pp%ier e%se5here! .oth sides no5 ha&e an interest in
disso%&ing the )ontra)t! +n %ega% theor'F the' enter a ne5 )ontra)t to ann/% the o%d )ontra)t!
(The m/t/a% s/rrender of rights is seen as pro&iding the ne)essar' )onsideration!)
9nfort/nate%' the term rescission is /sed in other )ontexts than a m/t/a% agreement to end
a )ontra)tT internationa% )ontra)t drafting 5o/%d 4enefit if it 5ere not!
*mpossibilit0 and Frustration
:))asiona%%' a )ontra)t is dis)harged 4e)a/se it is impossi4%e or tota%%' point%ess to
)ontin/e 5ith it! The )%assi) )ases are a )ontra)t to rent a m/si) ha%% 5hi)h 4/rns do5nUno
m/si) ha%%F no )ontra)tUand a )ontra)t to rent s)ats a%ong the ro/te of a pro)ession 5hi)h
is )an)e%%edUon)e againF no pro)essionF no )ontra)t! Most %ega%
s'stems re)ogniOe that sometimes a )ontra)t has %ost its point and gi&e one of the parties
the right to end it! ./t the )o/rts are re%/)tant to a%%o5 thisU)ontra)ts are signed to 4e eptF
not to 4e 4roen!

The exporter is 5ise to ass/me that performan)e 5i%% 4e reJ/ired!
TQE ,A#R9ARE :8 TQE C:#TRACT
Khene&er &ersions of a sing%e do)/ment exist in t5o %ang/agesF there are
Conf%i)ts: no trans%ation is e&er perfe)t! +dea%%'F the parties sho/%d agree on a )ontra)t
%ang/ageF maing it )%ear that trans%ations do not ha&e the same a/thorit' as the origina%
&ersion in the )ontra)t %ang/age!
Khat happensF tho/ghF if the parties )annot agreeP There are t5o roads: (a) the parties sa'
nothing at a%%Uin a disp/teF the S/dge de)ides 5hi)h &ersion to tr/stT (4) the parties mae
t5o (or more) &ersions eJ/a%%' a/thoritati&eT againF the S/dge de)ides 5hi)h &ersion to
fa&or!
CONCEPT RE7IE: 1
TONGUE T:ISTER
Read this stat/s-of-the-)ontra)t and ass/me the )ontra)t sa's nothing e%se a4o/t
%ang/age!
(opies of the (ontract# one in English and one in S+ahiti# ha/e been signed b0 bothe
parties. Each part0 retains one cop0 in each language.
1! Khat are the dangers of a )%a/se %ie thisP
"! Kh' do 'o/ thin the t5o sides a))epted itP
1! Trans%ations a%5a's prod/)e )onf%i)tsT the danger here is that no4od' no5s
5hi)h &ersion pre&ai%s!
"! The reason that t5o sides a))ept a %oose )%a/se %ie this is /s/a%%' %aOiness U and a
hope that pro4%ems 5i%% not arise! #ot the 4est )ontra)t pra)ti)e!
CONCEPT RE7IE: '
F-n"0ent"#!
It !s se-do$ easy to de%!de !" a "a!-+*e to 'e*"o*$ ,y the othe* s!de %onst!t+tes a
K"+nda$enta- ,*ea%h.K Re$e$,e*!n2 that d!""!%+-t %ases o"ten "!n!sh +' !n the %o+*ts ,e%a+se the
-a#ye*s "o* the t#o s!des %annot a2*ee1 -oo. at ea%h o" these s!t+at!ons and $a.e yo+* K,est 2+ess.K
.
1. 9e-!e*y !s t#o #ee.s -ate. The e6'o*te* !s *e>+!*ed +nde* the %ont*a%t to 'ay -!>+!dated da$a2es
o" ).(n o" the %ont*a%t '*!%e 'e* #ee. +' to a $a6!$+$ o" (n.
;UN9AMENTAG NOT ;UN9AMENTAG NO BREACH
0. Sa$e s!t+at!on1 e6%e't that de-!e*y !s s!6ty #ee.s -ate.
;UN9AMENTAG NOT ;UN9AMENTAG NO BREACH
4. A $a%h!ne that !s o" the 2*eatest !$'o*tan%e !n the ,+ye*Hs o'e*at!ons ,*ea.s do#n one #ee. a"te*
de-!e*y. The*e !s a s!6 $onth de"e%ts -!a,!-!ty '*o!s!on !n the
%ont*a%t.
;UN9AMENTAG NOT ;UN9AMENTAG NO BREACH
8. The ,+ye* a2*ees to o'en a -ette* o" %*ed!t1 ,+t. th*ee $onths a"te* the a2*eed date1 the -ette* o"
%*ed!t has st!-- not ,een o'ened.
;UN9AMENTAG NOT ;UN9AMENTAG NO BREACH
(. The ,+ye* a2*ees to o'en a %on"!*$ed -ette* o" %*ed!t #!th the ;!*st Wo*-d Ban. o" She,oy2an.
When the %on"!*$ed -ette* o" %*ed!t a**!es1 !t !s !ss+ed ,y the Moon
Ban. o" De*,ena.
;UN9AMENTAG NOT ;UN9AMENTAG NO BREACH
1! #o 4rea)h! The )ontra)t a%%o5s %ate de%i&er'!
"! A%most )ertain%' f/ndamenta% 4rea)h! ;ixt' 5ees de%a' is fift' 5ees %onger
than the )ontra)t foresa5 in the %iJ/idated damaged pro&ision! ;/)h a de%a'
5o/%dF in most )asesF go Vto the heart of the )ontra)t!V
3! #o 4rea)h! The )ontra)t foresees )/re of defe)ts!
4! 8/ndamenta% 4rea)h
2! (ro4a4%' not f/ndamenta% 4rea)hUthe iss/ing 4an has ased forF and
re)ei&ed!)onfirmation 4' a 4an in the exporterWs )o/ntr'! The exporterW s interests are
f/%%' )o&ered!
Sett#e0ent of Di!3-te!
TE P!OBLE#
Man' disp/tes are /nne)essari%' 4itter 4e)a/se the parties did not spe)if' a )%ear and
detai%ed pro)ed/re for sett%ing their pro4%ems! Khat pro)ed/res are a&ai%a4%eP Khat 5ors
4est in the internationa% )ontextP
TE P!INCIPLE
Most negotiators prefer to tae disp/tes to ar4itration 4efore a spe)ia%ist )o/rt rather than
%itigation 4efore a %o)a% S/dge! To a&oid %ength' and expensi&e pro)eedingsF a 5e%% drafted
)ontra)t spe)ifies an a))epta4%e ar4itration pro)ed/re!
IN #O!E DEPT3
;igning a )ontra)t is %ie a 5edding in that fe5 of the peop%e in&o%&ed foresee the
arg/mentsF the disp/tesUe&en the J/arre%sUthat genera%%' the ahead! 9n%ie marriage
partnersF ho5e&erF the pani)s to a )ontra)t reg/%ate in ad&an)eF either express%' or
imp%i)it%'F a me)hanism for sett%ing their disp/tes! +f the )ontra)t sa's nothing exp%i)itF then
the app%i)a4%e %a5 pro&ides the ans5er litigation 4efore a S/dge!
Litig"tion
:f the three options a&ai%a4%e for sett%ing disp/tesF %itigation 4efore the )o/rts is
internationa%%' the %east attra)ti&e: it is p/4%i)F it is expensi&eF it is time-)ons/mingF and the
res/%ts are &er' %ega%isti) rather than 4/siness%ie! 8or the exporter and the 4/'erF
%itigation in a )i&i% )o/rt )reates spe)ia% pro4%ems: if it sometimes appears diffi)/%t to get
S/sti)e in oneWs o5n )o/ntr'-Uin a foreign )o/ntr' it ma' seem impossi4%e! Get one side
m/st ine&ita4%' appear in a foreign )o/rt! ;in)e most peop%e are re%/)tant to a))ept this
serio/s disad&antageF 5hat are the other )hoi)esP
Man' )ontra)ts foresee a t5o-step pro)ess for disp/te reso%/tion:
Ami)a4%e ;ett%ementT
Ar4itration!
The first stepUami)a4%e sett%ementUis not essentia%F 4/t it is 5orth )onsidering in an'
export negotiation!
Ami)a4%e ;ett%ement and Con)i%iation
The &er' 5ord Vdisp/teV s/ggests an angr' )onfrontation 4et5een t5o sides ea)h of
5hi)h 4e%ie&es it is in the rightUan /nhea%th' 4/siness sit/ation! An ami)a4%e sett%ement
)%a/se )a%%s for the friend%' sett%ement of disagreements 4efore the' t/rn into disp/tes! A
t'pi)a% 5ording:
Re!o#-tion of Di!3-te!
The ./'er and the ;e%%er sha%% mae e&er' effort to reso%&e ami)a4%' 4' dire)tF informa%
negotiation an' disagreement or disp/te arising 4et5een them /nder or in )onne)tion 5ith
the Contra)t!
ARBITRATION
+f the t5o sides )annot rea)h agreement 4et5een themse%&esF the reso%/tion of their disp/te
reJ/ires a for/m! This is a )o/rt of %a5 /n%ess the parties spe)if' other5ise! +n pra)ti)eF
most )ontra)ts do spe)if' other5iseF )a%%ing ar4itration!
Ar4itration has a %ong histor'! +t 4egan 5ith )o/rts set /p 4' medie&a% trade g/i%ds to sett%e
disp/tes among g/i%d mem4ers! ;/)h mem4ers-on%' )o/rts ept things pri&ate and )heapT
f/rther the S/dges 5ere senior pra)titioners of the )raft 5ho /nderstood the 4/siness
perfe)t%'!
The other ad&antages of ar4itration are:
+ts tenden)' to 4e J/i)er than %itigation (at %east there is no %ength' appea%s pro)ed/re)T
The foreseea4i%it' of the )osts!
:n the other handF )osts are extreme%' highF and man' )osts- exe)/ti&e time in&ested in
preparing the )aseF for examp%e- )an ne&er 4e re)o&ered! E&en soF most )ontra)ts )ontain
a )%a/se spe)if'ing ar4itrationT )ompared 5ith %itigation it is genera%%' seen as the %esser of
t5o e&i%s!
+n drafting an ar4itration )%a/seF fo/r pra)ti)a% J/estions m/st 4e reso%&ed:
- Qo5 man' ar4itrators sit in the )o/rtP
-Khere does the )o/rt sitP
-Khat is the %ang/age of the )o/rtP
-Kho pa's )o/rt )ostsP
$oes the )o/rt of ar4itration ha&e the po5er to enfor)e its S/dgement and mae others
)omp%'P +n a dire)t senseF no! +n pra)ti)eF ho5e&erF an ar4itra% a5ard )an norma%%' 4e
enfor)ed thro/gh the )i&i% )o/rts! Ci&i% )o/rts tae ne)essar' steps to order to pa' for fine or
)ompensation 4e)a/se most trading )o/ntries ha&e a))epted the maSor internationa%
)on&ention on the enfor)ement of a5ards- the so-)a%%ed #e5 Gor Con&ention! :thers ha&e
4i%atera% arrangements or ha&e signed other a))ords! ./t a 5ord of )a/tion is in order here:
ha&ing a right to enfor)ement and a)hie&ing enfor)ement are t5o different things! +f the
4/'er )omes from a! )o/ntr' 5hi)h has a! poor rep/tation for enfor)ing a5ardsU-or if the
)o/ntr' is not a signator' to the Con&entionUthen the exporter sho/%d 4e espe)ia%%' )aref/%
to ens/re that pa'ment is se)/re prefera4%' 5ith an a%-sightF )onfirmed %etter of )redit!
Mone' in hand is a%5a's prefera4%e to a right to 4e paid mone' in a far-off )o/ntr'!
In Con,#-!ion
:&era%%F the main )on)ern of the t5o sides sho/%d 4e disp/te a/oidance# rather than disp/te
management! 8orma% disp/te reso%/tion is expensi&e and damaging to 4/siness
re%ationshipsUe/en if 0ou +in.
CONCEPT RE7IE:
Be&on Di!3-te
.%/e Hing .eer is a 4re5er' in Ver4ena that exports a4o/t 4D of it prod/)tion! .%/e Hing
is negotiating 5ith a hote% )hain in EsperanOa to s/pp%' a range of Vfan)'V 4eers s/ited to
the taste of to/rists! The minim/m )ontra)t pri)e o&er a period of three 'ears is agreed as
N4DDFDDDUa4o/t 2 of .%/e HingWs t/rno&er! $/ring negotiations the s/4Se)t of a
sett%ement of disp/tes )%a/se )omes /p! Qo5 5o/%d 'o/ ad&ise the t+o sides 5hen the'
as 'o/ the fo%%o5ing J/estionsP +n ea)h )ase gi&e 'o/r reasons in the spa)e pro&ided!
1! +s it reasona4%e to omit a sett%ement of disp/tes )%a/se )omp%ete%'P
GE; #: !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
"! +f noF sho/%d 5e spe)if' ar4itrationP :r %itigationP
AR.+TRAT+:# ,iTiRATi:# !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
3! ;ho/%d 5e add an ami)a4%e sett%ement pro&isionP
GE; #: !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
4! +f 'esF sho/%d this pro&ision )ontain a detai%ed pro)ed/re for ami)a4%e sett%ementP
GE; #: !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
@. +f a )ontra)t spe)ifies ar4itrationF 5here is! the 4est p%a)e tor the tri4/na% to meetP
9#;(EC+8+E$ .9GERW; C:9#TRG #E9TRA, C:9#TRG
EL(:RTERW; C:9#TRG! C:9#TRG :8 TQE $E8E#$A#T
3! ;ho/%d 5e state that 4oth sides a))ept an' ar4itra% a5ard as Vfina% and 4indingVP
GE; #: ZZZZZZZZZZZZZZZZZZZZZZ!
1! #o! A siOa4%e )ontra)t sho/%d )ontain a )%a/se on sett%ement of disp/tes!
"! Ar4itrationUit is %ie%' to 4e J/i)erF )heaper and more 4/siness%ieT it 5i%% not p/t one
side at a rea% (or imagined) disad&antage 4efore the nationa% )o/rts of the other!
3! Ges! A serio/s (and s/))essf/%) attempt at ami)a4%e sett%ement )an sa&e h/ge s/ms
of mone'!
4! Ges! A pro)ed/re Tin s/pport of ami)a4%e sett%ement has 4een fo/nd to sa&e
)onsidera4%e %ega% )osts and management %ime!
2! (ossi4%' the )o/ntr' of the defendant! This )reates extra )osts for the side
5ishing to 4egin the disp/te and th/s maes ami)a4%e sett%ement more %ie%'!
3! Ges! +t is a%5a's 5orth stating this e&en tho/gh s/)h )%a/ses are not a%5a's
enfor)ea4%e!
CHAPTER */ THE EXPORT CONTRACT
1. M"2ing the Cont%",t S"fe
THE PROBLEM
:n)e a%% the )ommer)ia% and %ega% de)isions ha&e 4een made and p/t into )ontra)t formF
the exporter ma' sti%% 4e at ris! Qo5 )an the %ast )ontra)t/a% riss 4e e%iminatedP
THE PRINCIPLE
The )ontra)t m/st 4e s'stemati)a%%' examined for 5eanesses 4efore it is signed! The fo/r
step pro)ess that examines the )ontra)t )ei%ingsF spe)ia% riss that )ome from the parti)/%ar
)ir)/mstan)es of the )ontra)tF riss that )ome from o/tside the )ontra)t and riss that might
4e hidden in the app%i)a4%e %a5!
IN MORE DEPTH
,etMs thin of the )ontra)t as an o%d-fashioned )ast%e! Qo5 )an the exporter mae the )ast%e
safeP :4&io/s%' 4' %ooing for 5eanesses and 4' finding 5a's to strengthen the )ast%e at
those points! Ke 5i%% ha&e a tid' fo/r-step approa)h to maing o/r )ontra)ts safe!
;TE( 1! CE+,+#R: Are an' %ia4i%itites /n%imitedP
;TE( "! R:A$.,:CH: Khat spe)ia% riss sho/%d 4e %imitedP
;TE( 3! +R:# C9RTA+#: Qo5 )an the exporter %imit the effe)t of the app%i)a4%e %a5P
;TE( 4! ;+R#(:;T;: Qo5 )an the exporter %imit the effe)t of third part' a)tionsP
;TE( 1: TQE CE+,+#R
The exporter 5i%% )ertain%' noti)e se&era% p%a)es 5here he has agreed to mae pa'ments: if
he is %ateF for examp%eT if a ma)hine fai%s to rea)h promised spe)ifi)ationsT if he is %ate in
)/ring a defe)tT or 5hate&er! Ea)h of these %ia4i%ities m/st 4e )apped in some 5a': a )ei%ing
fig/re m/st 4e set! A f/%% examination of the )ontra)t dis)o&ers 5here the exporter has
/n%imited time or mone' %ia4i%ities: a )ei%ing )%a/se maes the sit/ation safe!
;TE( ": TQE R:A$.,:CH
The most fami%iar road4%o)s in export )ontra)ts are set /p to )o&er for)e maSe/rre and the
exporterMs %ia4i%it' for )onseJ/entia% %oss or damage in)/rred 4' the 4/'er!
Ea)h indi&id/a% )ontra)t en)o/nters different riss arising perhaps from:
The nat/re of the prod/)tT
The means of transportT
The maret sit/ationT
The e)onomi) or po%iti)a% sit/ation in the exporterMs or the 4/'erMs )o/ntr'!
;TE( 3: TQE +R:# C9RTA+#
The tota% agreement 4et5een the t5o sides is their 5ritten )ontra)t p%/s the re%e&ant
pro&isions of the app%i)a4%e %a5! +t has a%so 4e)ome )%ear that the app%i)a4%e %a5- espe)ia%%'
if it is the %a5 of other side- )an )ontain /n5e%)ome s/rprises: rights of the 4/'er against
the exporterF d/ties of the exporter that in&o%&e /nexpe)ted )ost! The sit/ation )an 4e
)%arified to some extent 4' the in)%/sion of an -iron )/rtain0 )%a/se! The iron )/rtain )%a/seF
perhapsF is %ie a ring-5a%%F Soining a%% the defensi&e o/tposts and road4%o)s aro/nd
Contra)t Cast%e! #o approa)h is a%%o5ed /n%ess it is thro/gh an a))epted and /nderstood
door5a'!
;TE( 4: CQA#R+#R TQE R:A$;+R#;
There are t5o %ie%' so/r)es of third part' interferen)e in the exporterMs )ontra)t affairs: the
tax offi)e is oneF and the other are o/tsiders 5ho s/stain some %oss or inS/r' from goods
s/pp%ied /nder the )ontra)t!
+n his o5n )o/ntr'F the exporter m/st pa' an' taxes %e&ied 4' his go&ernment- that is
o4&io/s! Qo5e&erF the exporter ma' find- espe)ia%%' /nder $$( )ontra)ts 5here part of the
5or is done and part of the profit is earned in the 4/'erMs )o/ntr'- that the 4/'erMs
go&ernment a%so 5ishes to )o%%e)t taxes from him! #at/ra%%' he )annot ref/se to pa'- 4/t he
)an at %east -)hange the roadsign!0 Qe )an redire)t the tax offi)e to the 4/'erMs address 4'
/sing the standard )%a/se on taxation!

The exporter tries to %imit (or ex)%/de) %ia4i%it' 5here&er possi4%e! The ta4%e 4e%o5 sho5s the
areas 5here the exporter is most at ris and a)tions he 5i%% tr' to tae to red/)e his %ia4i%it'
to a foreseea4%e fig/re!
$E,+VERG $E8ECT;
,+A.+,+TG
T:TA,
,+A.+,+TG
:TQER TERM+#AT+:#
$efine 5hat
)o/nts as
de%a' and
5hat does not
$efine 5hat
)o/nts as a
defe)t and
5hat does not
+f possi4%eF
pass the 4/)
5ith an
indemnifi)atio
n )%a/se
;ear)h for
other danger
areas
,imit
termination for
defa/%t to
)%ose%' defined
sit/ations
$efine
ex)/sa4%e
de%a'F
espe)ia%%'
for)e maSe/re
,imit d/ties to
repairing or
rep%a)ing
goods 5ith
%atent defe)ts
Tr' to %imit
'o/r tota%
%ia4i%it' to 'o/r
ins/ran)e
)o&erage
$efine the
danger and
5rite a )%a/se
that %imits or
ex)%/des
%ia4i%it'
Ens/re that
'o/ 5i%% 4e paid
for 5or
performed /p
to the date of
termination
Tr' to get a
gra)e period
Ex)%/de
%ia4i%it' for
)onseJ/entia%
%oss or
damage
Tr' to ex)%/de
pa'ment of
damages if
termination is
a%%o5ed
Tr' to ex)%/de other remedies if
)arriages are paid
;ET A CE+,+#R
A$$ A# +R:# C9RTA+#
-A%% rights and d/ties not express%' in)%/ded are ex)%/ded!0
(page "D3) USING A MODEL CONTRACT
THE PROBLEM
Asing a %a5'er to draft a )omp%ete )ontra)t for ea)h export dea% does a%5a's mae
e)onomi) sense: the time and mone' in&ested are o/t of proportion to the &a%/e of the
)ontra)t! +n s/)h )asesF the exporter is tempted to pro)eed 5itho/t an' ind of )ontra)t! +s
this dangero/sP Kh' or 5h' notP
THE PRINCIPLE
A mode% )ontra)t is a ha%f-5a' ho/se 4et5een the dangero/s pra)ti)e of trading 5itho/t a
)ontra)t and the expensi&e pra)ti)e of asing a %a5'er to tai%or a )ontra)t for ea)h dea%! #o
mode% )ontra)t )an reg/%ate e&er' pro4%emF 4/t most important iss/es )an 4e addressed
and reasona4%e a%ternati&es s/ggested!
+nternationa% trade 4et5een )ompanies on different )ontinents 5ith different )/%t/res and
different )on)epts of %a5 )annot ris s/)h informa% pro)eedings! 8or an agreement to 4e
)%earF 5ora4%e and enfor)ea4%eF it m/st norma%%' 4e red/)ed to a 5rittenF signed )ontra)t!
IN MORE DEPTH
9nfort/nate%'F asing a %a5'er to draft a )ontra)t for ea)h ne5 agreement is )ost%' and
time-)ons/mingT man' )ompanies simp%' donMt 4other! This is 5here a -mode% )ontra)t0 is
he%pf/%! 9nfort/nate%'F ho5e&erF /sing a mode% )ontra)t is not as eas' as it so/nds! Man'
mode% )ontra)ts are too genera%T 5ith o&er 12D nations in the 5or%dF ea)h 5ith its o5n %a5 E
no mode% )ontra)t )an )o&er them a%%! :ther mode%s are too spe)ia%iOed: a mode% )ontra)t
designed for /se in Eng%and offers offers %itt%e g/idan)e to an Ethiopian exporter tr'ing to
se%% a ma)hine to Vietnam! +n e&er' )aseF a mode% )ontra)t reJ/ires adaption 4efore it
meets the needs of the t5o sides!
T%"n!#"te the fo##o5ing Con$ention into 7ietn"0e!e. The t%"n!#"tion gi$en on the
%ight !e%$e! "! e6"03#e fo% &o- to ,ontin-e.
I(( MO$*L (ONTRA(T +OR T,* SAL* O+ -OO$S
,Mp N ng . u 0u t nhMp khMu ,Ong hPa cMa 1hQng T. Ru c t
.) T,* (ONTRA(T IN *N-LIS,
(ONTRA(T +OR T,* SAL* O+ -OO$S
CET$EEN
...................................... hereinafter called 9the 3E++E29
)N&
...................................... hereinafter called 9the C5/E29
PR*AMBL*
!N"#$% #he Preamble is optional& H
The agreement between the parties to this 4ontract is based on the following understandings6
!N"#$% #he followin' clauses are examples only. Delete as
appropriate&
1. The C5/E2 is acting partl' on its own behalf and partl' as a purchasing agent for other companies
#. The C5/E2 is acting as purchasing agent for .....................H
3. Coth parties understand that 7oods made to the C5/E2H3 special specifications ma' ha"e no "alue or "er'
limited "alue on the open market
*. The 3E++E2 understands that the C5/E2 in specif'ing the 7oods has relied to a large e%tent on the
e%pertise of the 3E++E2
>. The 3E++E2 understands that the C5/E2 is under contract to resell the 7oods and that if the 7oods are
defecti"e or non@conforming in !ualit' or !uantit' the C5/E2 ma' be liable for damages in an amount
e%ceeding .....................A(urrency an amount&
E. The 3E++E2 understands that the C5/E2 intends to install the 7oods as a component part in e!uipment to
be resold and that if the 7oods are defecti"e or non@conforming in !ualit' or !uantit' the C5/E2 ma' be liable
for substantial damages
S. TTTTTTTTTT..A)ist of aitional bac*'roun unerstanin's between the parties&
.) A##li%a/le La0
This 4ontract and all !uestions relating to its formation "alidit' interpretation or performance shall be go"erned
b' the law of.............AName of countryB
!N"#$% #he subclause below is optional&
This 4ontract shall not include incorporate or be subKect to the pro"isions of the 95nited Nations 4on"ention on
4ontracts for the International 3ale of 7oods9
2) $efini!ion"
In this 4ontract the words below ha"e the meanings ascribed to them unless the conte%t otherwise clearl'
dictates6
#.<. 5nless e%pressl' modified b' the parties 9F-C9 94IF9 and other trade terms ha"e the meanings and
obligations ascribed to them in +ncoterms 2,,,, 1ublication *E? of the International 4hamber of 4ommerce
1aris
#.#. 94ontract9 means this 4ontract its preamble and appendices as well as all documents e%pressl' listed as
4ontract documents or otherwise e%pressl' mentioned in this 4ontract
#.3. 97oods9 means the 7oods specified in 4lause * below
#.*. 91rice9 means the 1rice as specified in 4lause = below pa'able to the 3E++E2 for the 7oods
#.>. 9&eli"er'9 means &eli"er' as specified in +ncoterms <==? under the Incoterm or Incorterms agreed in this
4ontract
#.E. 9&a'9 means a calendar &a'. For the purposes of this 4ontract 3aturda's 3unda's and all holida's are
considered as &a's
#.S. 9&irect9 costs and losses are costs and losses arising in immediate connection with an' failure to deli"er
an' dela' in &eli"er' or an' defect in 7oods deli"ered under this 4ontract.
3uch costs and losses must ha"e an immediate foreseeable and probabl' causal connection with the dela' or
defect. )ll other costs and losses are deemed b' this 4ontract to be 9indirect9J In particular loss of profit loss of
use and loss of contract are considered indirect losses
#.L. 97o"ernment9 means national 7o"ernment local 7o"ernment local authorities and their agencies.
In particular customs andIor e%cise departments are considered
as 7o"ernment agencies
#.=. 9Termination9 means the discharge of the 4ontract b' one of the parties under an' right e%pressl' granted
b' this 4ontractJ The discharge of the 4ontract b' an' other right arising from the applicable law or an' oilier
source is deemed to be 9cancellation9 of the 4ontract
#.<?. ........................Alist of aitional efinitions a'ree between the parties&
3) *n!ire Aree'en! and (on!ra%! $o%&'en!"
This 4ontract constitutes the entire agreement and understanding between the parties. There are no
understandings agreements conditions reser"ations or representation oral or written that are not embodied
in this 4ontract or that ha"e not been supersede b' this 4ontract
!N"#$% #he subclause an list below are optional&
In addition to the te%t of 4ontract itself the documents listed below shall form part of the 4ontractJ )ll listed
documents and the clauses of this 4ontract shall be read if possible so as to be consistentJ In the e"ent of
conflict the order of precedence for the pro"isions and documents which constitute this agreement shall be as
follows6
!N"#$% #he list below contains e-amples only. .elete as appropriate&
a. )n' alterations made on the face of the printed 4ontract
b. The 4ontract itself
c. 3pecifications
d. .anufacturing drawings
e. The C5/E2H3 3pecialI 7eneral 4onditions of 1urchase
f. The 3E++E2H3 3peciaV7eneral 4onditions of 3ale
g. .....................................................................A /urther contract ocuments&.
*. 3cope of 3uppl'
The 7oods to be deli"ered under this 4ontract are specified .......A0se 1below1 or2the name of the anne- where
the 'oos are specifie&
5) $eli1er2
5.1. Date, Place and Terms o Deli!ery
&eli"er' of the 7oods shall be made ...............Aagreed IncotermsBJ the schedule date of &eli"er' shall
be ...............A 3'ree ate of elivery&J 2isk and title to the 7oods shall pass from the 3E++E2 to the C5/E2
on &eli"er'
The place of &eli"er' under this 4ontract is ..............................A3'ree place of elivery. Note% +n /"4, /(5,
(+/ an (+P.!etc.& contract, this is part of shipment&.
5.". #aming and $rri!al o %essel
!N"#$% #his clause is intene primarily for use in /"4 an /36 contracts&.
The C5/E2 shall ad"ise the 3E++E2 of the name of the "essel not later than ...........ANumber of ays&. &a's
before the agreed &eli"er' date
If the "essel named b' the C5/E2 fails to arri"e on or before ...................A .ate of arrival of ship&. then the
3E++E2 ma' at his discretion deli"er the 7oods to a bonded warehouse in the port of ................A Port of
shipment&. and shall be deemed to ha"e fulfilled his &eli"er' obligations under this
4ontractJ In this e"ent the 3E++E2 must notif' the C5/E2 of the full circumstances of the &eli"er' to the
warehouse. $ith &eli"er' to the warehouse all costs including but not limited to cost of storage and insurance
are to the C5/E2H3 account
5)3) Shipping &ar's and Pac'aging
!N"#$% #he followin' two subclauses are e-amples7 rewor as appropriate&.
-n the surface of each package deli"ered under this 4ontract shall be marked6 the package number the
measurements of the package gross weight net weight the lifting positions the letter of credit number the
words 2I7,T 3I&E 51 ,)N&+E $IT, 4)2EH6
UEE1 &2/ and the mark .....................................A 6hippin' mar*B
7oods are to be packed in ...................A .escription of re8uire pac*in'& and are to be well protected against
dampness shock rust or rough handling. The 3E++E2 shall be liable for an' damage to or loss of the 7oods
attributable to improper or defecti"e packaging
!N"#$% #he followin' subclause is relevant only to eliveries in 9ermany&.
5.(. Disposal o Pac'aging
2esponsibilit' for the disposal of an' packaging shall be the C5/E2H3 .
6) No!ifi%a!ion of $eli1er2
!N"#$% #his clause applies lar'ely to contracts uner which elivery ta*es place in the country of the seller&.
lmmediatel' on &eli"er' the 3E++E2 shall notif' the C5/E2 of deli"er' b' .................. A:eans of notification,
e.'., /3;B.

This notification shall include TT..A)ist of ocuments an information re8uire&
). In"#e%!ion /efore "hi#'en!
<.1. +nspection by the 4uyer
The C5/E2 ma' at the C5/E2H3 option inspect the 7oods prior to shipment. )t least .............. ANumber of
ays&. &a's before the actual &eli"er' date the 3E++E2 shall gi"e notice to the C5/E2 or to an' agent
nominated b' the C5/E2 that the 7oods are a"ailable for inspection. The 3E++E2 shall permit access to the
7oods for purposes of inspection at a reasonable time agreed b' the parties
!N"#$% (ustoms re8uirements for importation of 'oos into +nonesia an the Philippines re8uire inspection by
696 prior to shipment from the 6eller=s country. #he followin' clause is
recommene for sales to these countries&.
<.2. +nspection by +nspection service
The parties understand that importation into ............AName of country& re!uires inspection of 7oods b' 373
before shipment from the 3E++E2H3 countr'J The 3E++E2 agrees to cooperate full' with the 372H in pro"iding
access to and necessar' information about the 7oods for the purpose of such inspection
L. *arl2 $eli1er23 Par!ial Shi#'en!3 $ela2 in $eli1er2
>.1. $arly .elivery
!N"#$% #he three sub?clauses below, are alternatives. .elete as necessary&.
Earl' &eli"er' is not permitted under this 4ontract
&eli"er' up to .........ANumber of ays&. &a's earl' is permittedJ howe"er pa'ment shall not become due until
the date agreed for pa'ment in this 4ontract.
&eli"er' up to .......... ANumber of ays& &a's earl' His permittedJ in this case pa'ment shall fall due as though
the actual &eli"er' date were the &eli"er' date agreed in the 4ontract.
>.2. Partial 6hipment
!N"#$% #he two sub?clauses below are alternatives. .elete as necessary&.
1artial shipment is not permitted under this 4ontract
1artial shipment is permitted under this 4ontract subKect to the agreement of both partiesJ howe"er an' costs
arising from partial shipment shall be to the account of the .........A40Y$5 or 6$))$5&.
4)3) Delay in Deli!ery
In the e"ent of late &eli"er' for reasons other than force maKeure as defined in 4lause <S below the 3E++E2
shall pa' as li8uiate ama'es and not as a penalt' the sum of .........AFigureB. of the "alue of the
undeli"ered part per &a' of late &eli"er' up to a ma%imum of
......... AFigureB. of the 4ontract 1riceJ 1a'ment of li!uidated damages shall be due without the C5/E2 ha"ing
to furnish proof of an' loss damage or inKure
!N"#$% #he two sub?clauses below are alternatives. .elete as necessary&.
1a'ment of li!uidated damages shall constitute full an complete satisfaction of an' claim of the C5/E2
against the 3E++E2 arisin' from the or in connection with late &eli"er' of an' 7oodsJ In particular the 3E++E2
shall not be liable for an' indirect loss or damage as defined in 4lause #.S abo"e arising from or In connection
with late &eli"er' of an' 7oods.
1a'ment of li!uidated damages b' the 3E++E2 shall not preclue the C5/E2 from seeking compensator'
damages from the 3E++E2 for an' loss inKur' or damage arising from or in
connection with late &eli"er' of an' 7oodsJ In particular the C5/E2 shall be entitled to compensation from the
3E++E2 for an' indirect or conse8uential loss or ama'e, including but not limited to loss of profit loss of use
or loss of contract arising from or in connection with late &eli"er' of an' 7oodsJ ,owe"er pa'ments made as
li!uidated damages shall be offset against an' compensator' damages reco"ered from the 3E++E2 for the late
&eli"er' of an' 7oods.
*.(. Termination or Delay
In the e"ent that the 3E++E2 becomes liable to pa' the ma%imum sum pa'able as li!uidated damages under
4lause L.3 abo"e then the C5/E2 shall upon due notice ha"e the rignt to terminate the 4ontract H
5) Pri%e
The 1rice for the 7oods to be deli"ered under this 4ontract is ........ (urrency symbol an fi'ure.


A...................(urrency an fi'ure in wors.B
.0) Ter'" of Pa2'en!
1a'ment shall be made b' means of an irre"ocable confirmed letter of creditJ The C5/E2 shall open the letter
of credit on or before .........A .ate of openin' of letter of creit&. on the terms agreed b' the parties and anne%ed
to this 4ontract a8 )ppendi% .......... .........A3ppeni- number&.
This 4ontract shall not come into force under 4lause <E below until the 3E++E2 has recei"ed ad"ice that the
letter of credit has been opened in his fa"our and has ascertained that the terms are in accordance with those
agreed between the partiesJ )n' discrepanc' between the terms agreed b' the parties and the letter of credit as
issued shall be notified b' the 3E++E2 to the C5/E2 immediatel'
..) In"#e%!ion of !he -ood"
11.1. Duty to +nspection and #otiy Discrepancies
The C5/E2 shall inspect the 7oods on their arri"al at the place of destination. If the 7oods fail to conform with
the 4ontract in either !ualit' or !uantit' then the C5/E2 shall notif' the
3E++E2 of an' discrepanc' without dela'
11.". Failure to #otiy Discrepancies
If the C5/E2 does not notif' the 3E++E2 of an' such
discrepanc' within ......... ANumber of ays&. &a's of the arri"al of the 7oods then the 7oods shall be deemed
to ha"e been in conformit' with the 4ontract on arri"al.
11.,. -uyer.s /ights in the 0!ent o Discrepancy in 1uantity
If a material discrepanc' in !uantit' e%ists and is dul' notified to the 3E++E2 the C5/E2 at his discretion and
subKect to 4lause
L.# abo"e ma' either6
a. )ccept the deli"ered portion of the 7oods and re!uire the 3E++E2 to deli"er the remaining portion forthwithJ
or
b. )ccept the deli"ered portion of the 7oods and terminate the remaining portion of the 4ontract upon due
notice gi"en to the 3E++E2.
If an' material discrepanc' in !uantit' e%ists such that TTT..T.A.escription of funamental iscrepancyB and
if such discrepanc' is dul' notified to the 3E++E2 the C5/E2 ma' at his discretion6
a. )dopt either of the remedies prescribed abo"e in this clauseJ
or
b. 2eKect the deli"ered portion of the 7oods and reco"er from the
3E++E2 all pa'ments made to the 3E++E2 as well as all costs e%penses and customs duties incurred b' the
C5/E2 in association with the shipment mo"ement through customs insurance or storage of the 7oods
!N"#$% (lause 11.4 below may not be necessary if 696 inspection ta*es place before shipment&.
11.(. -uyer.s /ights in the 0!ent o Discrepancy in 1uality
&iscrepancies in !ualit' shall be considered as defects and shall gi"e rise to claims under the defects liabilit'
pro"ision of this 4ontract in 4lause <# below
,owe"er a fundamental discrepanc' in !ualit' shall gi"e the C5/E2 the right to refuse &eli"er' of the 7oods in
whole or in part and to reco"er from the 3E++E2 all pa'ments made for the unaccepted portion of the 7oods as
well as all costs e%penses and customs duties incurred b' the C5/E2 in association with the shipment
mo"ement through customs insurance or storage of the unaccepted portion of the 7oods
<#. $efe%!" Lia/ili!2
1".1. Seller.s Lia2ility or Deects
The 3E++E2 warrants that the 7oods supplied under this 4ontract shall at the date of their &eli"er'6
a. Ce free from defects in material
b. Ce free from defects in workmanship
c. Ce free from defects inherent in design including but not limited to selection of materials and be fit for the
purpose for which such 7oods are normall' used
If an' defect pro"abl' present in an' of the 7oods on the date of &eli"er' comes to light during the defects
liabilit' period then the C5/E2 shall forthwith notif' the 3E++E2J The 3E++E2 without undue dela' shall at
his own risk and cost and at his discretion repair or replace such item or otherwise make good the defect
The 3E++E2H3 liabilit' for defects is subKect to the C5/E2 ha"ing adhered to all procedures and instructions
applicable to the .......... (onition of use !e.'., 1stora'e, installation, use or operation1&
l
of the item and
e%pressl' e%cludes damage to the 7oods caused b' fair wear and tear or b' misuse occurring after &eli"er'
1".". Deects Lia2ility Period
The 3E++E2 shall be liable for defects which come to light during a period of .......... da's from ...........
#
J )fter
the end of this period the C5/E2 shall ha"e no right to raise claims of an' kind against the 3E++E2 for an'
defect in an' 7oods of the 3E++E2H3 suppl'
The defects liabilit' period shall be prolonged b' the length of an' period during which the 7oods cannot be
used b' the C5/E2 because of a defect. ,owe"er if new 7oods are deli"ered to replace defecti"e 7oods the
defects liabilit' period shall not begin again on
the replacement 7oods
.2)3) Limitation o Deects Lia2ility
!N"#$% #he two clauses below are alternatives. .elete as necessary&
The dut' to repair and replace or otherwise to make good defects is the onl' dut' of the 3E++E2 in the e"ent of
the &eli"er' of defecti"e 7oodsJ In particular the C5/E2 shall not be entitled to compensation from the
3E++E2 for anVH indirect loss or damages as defined in 4lause #.S abo"e arising from or in connection with
&eli"er' of defecti"e 7oods
The 3E++E2Hshall indemnif' and hold harmless the C5/E2 against an' loss or damage howe"er arising
whether direct or indirect which shall be suffered b' the C5/E2 as the result of defecti"e or fault' 7oods
deli"ered b' the 3E++E2.
.3) Lia/ili!2 !o Third Par!ie"
!N"#$% #he two clauses below are alternatives. .elete as necessary&
The ..........
3
shall compensate and hold harmless the .......... HHfrom an' award of damages reasonable costs
e%penses or legal fees in the e"ent of an' action or lawsuit b' a third part' resulting from an' inKur' loss or
damage to the third part' caused b' a defect in
the 7oods deli"ered under this 4ontract
In the e"ent of such +awsuit the ........H shall immediatel' notif' the ..........
6
and shall full' cooperate with
the ..........H in taking an' necessar' legal action.
In the e"ent of an' action or lawsuit b' a third part' resulting from an' inKur' loss or damage to the third part'
caused b' a defect in the 7oods deli"ered under this 4ontract the part' against whom the action or lawsuit is
brought shall bear all costs e%penses awards of damages or legal fees arising therefrom
.4) Ta6a!ion
)ll income ta%es "alue added ta%es customs duties e%cise charges stamp duties or other fees le"ied b' an'
7o"ernment 7o"ernment agenc' or similar authorit' shall be borne e%clusi"el' b' the part' against whom the'
are le"ied.
.5) A""in'en! of Rih!" and $elea!ion of $&!ie"
The rights under this 4ontract ma' not be assigned nor the duties delegated b' either part' without the prior
written consent of the other part'.
.6) (o'in In!o +or%e
This 4ontract shall come into force after signature b' both parties and after6
a. The issuance of a letter of credit in accordance with the terms of 4lause <? abo"eJ
b. .................................................................
#
If the 4ontract has not come into force within ..........
3
&a's of its signature b' both parties all its pro"isions shall
become null and "oid.
.7) +or%e 'a8e&re
!N"#$% #he wor dut' is mar*e= by an asteris* in this clause7 for contracts uner Philippines law, the wor
dut' shoul be replace by the wor obligationB.
If either part' is pre"ented from or dela'ed in performing an' dut' under this 4ontract b' an e"ent be'ond his
reasonable control then this e"ent shall be deemed force maKeure and this part' shall not be considered in
default and no remed'. be it under this 4ontract or otherwise shall be a"ailable to the other part'.
!N"#$% #he subclause below contains e-amples only. +t shoul be moifie as necessary&.
Force maKeure e"ents include but are not limited to6 war Awhether war is declared or notB Hriots insurrections
acts of sabotage or similar occurrences strikes or other labour unrestJ
newl' introduced +aws or 7o"ernment regulationsJ dela' due to 7o"ernment action or inaction or inaction on
the part of an' inspection agenc'J Fire e%plosion or other una"oidable accidentJ flood storm earth!uake or
other abnormal natural e"ent.
AN-TE6 The subclause below on non?force?ma@eure events is "ptional&
Force maKeure e"ents do not include .......... .......... .......... ..........
If either part' is pre"ented from or dela'ed in performing an' dut' under this 4ontract then this part' shall
immediatel' notif' the other part' of the e"ent of the dut' affected and of the e%pected duration of the e"ent.
If an' force maKeure e"ent pre"ents or dela's performance of an' dut' under this 4ontract for more than ..........
#
&a's then either parties ma' on due notification to the other part' terminate this 4ontract.
.4) Ter'ina!ion
Notice of Termination as defined in 4lause #.= of this 4ontract shall be in writing and shall take effect ..........
3

&a's from the receipt of such notice b' the part' notified.
In the e"ent of Termination the duties of the parties shall be as incurred up to the date of TerminationJ In
particular the 3E++E2 shall recei"e the full 1rice of an' 7oods deli"ered and accepted b' the C5/E2J The
pro"isions of this )greement dealing with defects liabilit' arbitration and such other pro"isions as are
necessar' in order to resol"e an' post@Termination disputes shall sur"i"e Termination.
.5) Par!ial In1alidi!2
If an' pro"ision or pro"isions of this 4ontract are in"alid or become in"alid then this shall ha"e no effect on the
remaining pro"isions. Further the parties agree to replace an' in"alid pro"ision with a new "alid pro"ision
ha"ing as far as possible the same intent as the pro"ision replaced.
20) Modifi%a!ion and 9ai1er
.odification of the terms and conditions of this 4ontract shall be binding on both parties e"en without
consideration if the modification is in writing is signed and is e%pressl' stated to be a modification of this
contract.
)n' wai"er of an' right under this 4ontract is binding on the part' making the wai"er e"en without consideration
pro"ided the wai"er is in writing is signed and is e%pressl' stated to be a wai"er of the said rightJ
2.) Lan&ae
The language of the 4ontract of all 4ontract &ocuments and of all correspondence and other communication
between the parties shall be English.
##. Notices
Notices ser"ed b' one part' to the other under this 4ontract shall be made in the first instance b' facsimile
transmission Ahereinafter called 9F)09B. ) further cop' of each notice shall be sent b' registered mail and
signed.
The effecti"e date of the notice shall be the date of F)0 transmission. In the e"ent of a dispute about the receipt
of a F)0 howe"er the effecti"e date of the notice shall be the date of receipt of the registered letter or a date
se"en da's after the registered
mailing whiche"er is earlier.
Notices shall be sent to the following addresses and F)0 numbers6
3E++E26 .......... .......... .......... .......... .......... .......... ..........
)ddress6.......... .......... .......... .......... ...H...... .......... ..........
F)0 Number6 .......... .......... .......... .......... .......... .......... ..........
C5/E26 .......... .......... .......... .......... .......... .......... ..........
)ddress6.......... .................... .......... ..........H.......... ..........
F)0 Number6 .......... ...H....... .......... .......... .......... ..@@@@ @
)n' change in an address or F)0 number shall be the subKect of a re!uired notice under this 4ontract.
23) Se!!le'en! of $i"#&!e"
)ll disputes arising in connection with this 4ontract shall be finall' settled under the 2ules of 4onciliation and
)rbitration of the International 4hamber of 4ommerce b' .......... Number !of arbitrators&H arbitrators
appointed in accordance with the said rules.
The place of arbitration shall be .......... Name of the place !city& of arbitration. The language of arbitration shall
be English.
!N"#$% #he three sub?clauses below are alternatives. .elete as necessary&.
In the e"ent of arbitration each part' shall bear its own costs.
In the e"ent of arbitration the court shall assess the amount of the costs to be borne b' each part'
In the e"ent of arbitration the part' against whom the award is made shall bear the entire costs of both parties
to the action.
The parties agree that an' award made in accordance with the pro"isions >f this clause is final and binding on
both parties.
: *6e%&!ion
The parties intending to be legall' bound ha"e signed this 4ontract on the dates and at the places stated
below6
For and on the behalf of6 For and on the behalf of6
3E++E2 C5/E2
Ti!le: Ti!le:
&ate6 &ate6
1lace6 1lace6
!N"#$% #he witnessin' of si'natures is not re8uire by all national laws&.
$itness of 3E++E2H3 3ignature $itness of C5/E2H3 3ignature
3. .-&E+ 4-NT2)4T F-2 T,E 3)+E -F 7--&3 )N& T,E 4IVI+ 4-&E -F VIETN). H
The are three main t'pes of contract under 44VN Asee appendi% # for the English and Vietnamese "ersionsB.
W 3alesI1rocurement 4ontract A*#<@**#B
W 4ontract to .anufacture A>>?@>E<B
W 4ontract for 3er"ices A>#<@>#=B
The model 4ontract is a pure 3ales 4ontract @ an e%change of 9assets9 for 9mone'9.
In @the following parts some principal clauses from the model 3ales contract are compared with the stipulations
regarding ci"il contracts b' the ci"il code of the 3ocialist 2epublic of Vietnam with a "iew to offering the reader
an insight into the subKect @ matter.
3.<. 3tructure of the .odel contract
Ahat you shoul *now before reain' the contract
1reamble
4lause < 6 )pplicable +aw
4lause # 6 &efinitions
4lause 3 6 Entire )greement and 4ontract &ocuments
3hat the 4uyer will 'et
4lause * 6 3cope of suppl'
4o5 the good 5ill 2e supplied
4lause > 6 &eli"er'
4lause E6 Notification of &eli"er'
4lause S6 Inspection before 3hipment
4lause L6 Earl' &eli"er' 1artial Shi#'en!3 and $ela2 in
&eli"er'
3hat the 4uyer will 'ive
4lause =J 1rice J
4o5 the -uyer 5ill pay
4lause <?6 Terms of 1a'ment
3hat i the goods are not as ordered 6
4lause <<6 Inspection of tlic 7oods
4lause <#6 &efects +iabilit'
Lia2ilities outside the contract
4lause <36 +iabilit' to Third 1arties
4lause <*6 Ta%ation
The legal status o the contract
4lause <>6 )ssignment of 2ights and $elea!ion of $&!ie"
4lause <E6 4oming Into Force
4lause <S6 Force .aKeure
4lause <L6 Termination
4lause <=6 1artial In"alidit'
4lause #?6 .odification
4lause #<6 +anguage
4lause ##6 Notices
4lause #36 3ettlement of &isputes
E%ecution
.etails not inclue in the main boy of the contract
)ppendices
4lause S6 Inspection before 3hipment
4lause L6 Earl' &eli"er' 1artial 3hipment and &ela' in &eli"er'
3hat the -uyer 5ill gi!e
. 4lause =6 1rice
4o5 the -uyer 5ill pay
4lause <?6 Terms of 1a'ment
3hat i the goods are not as ordered 6
4lause <<6 Inspection of the 7oods
4lause <#6 &efects +iabilit' . W .
Lia2ilities outside the contract
4lause <36 +iabilit' to Third 1arties
4lause <*6 Ta%ation
The legal status o the contract
4lause <>6 )ssignment of 2ights and $elea!ion of $&!ie"
4lause <E6 4oming Into Force ... X
4lause <S6 Force .aKeure H
4lause <L6 Termination
4lause <=6 1artial In"alidit'
4lause #?6 .odification
4lause #<6 +anguage
4lause ##6 Notices
4lause #36 3ettlement of &isputes
E%ecution
Details not include in the main 2ody o the contract
A##endi%e"
3)2) In!er#re!a!ion of !he (on!ra%! &nder ((VN
: Ar!i%le .35) +nterpretation o Ci!il Transactions
1. The interpretation of a ci"il transaction must be based upon the actual desire of the parties at the time of
establishing such transaction an on the obKecti"es of such transaction.
#. $here a ci"il transaction ma' be interpreted as ha"ing different meanings the ci"il transaction must be
interpreted in accordance with a meaning consistent with the obKecti"e of the transaction and shall be in
accordance with the customs of the place where the transaction was establishedJ if the part' which is
economicall' stronger includes in the ci"il
transaction points Hwhich are disad"antageous to the weaker part' the interpretation of the ci"il transaction
must be such that fa"ors the weaker part'.
: Ar!i%le 404) +nterpretation o contracts
<. If a contract contains unclear pro"isions the interpretation of such pro"isions shall not onl' rel' upon the
wording of the contract but also shall be based upon the common intentions of the parties.
#. If a clause of the contract susceptible of man' meanings shall be chosen the meaning which would
allow the implementation of the clause to most benefit the parties.
3. If a contract contains a wording with man' different meanings the contract shall be interpreted according to
the meaning which best conforms to the characteristics of the
contract.
*. If a contract contains clauses or words which are difficult to understand those shall be e%plained according
to the customs at the appointed place for the e%ecution of the contract.
>. $hen a contact lack some pro"isions not belonging to the essential substance the contract shall be
supplemented according to the customs in regard of such t'pes of contracts
at the appointed place for the e%ecution of the contract.
E. The clauses of contract shall be interpreted in relations to each other so that each is gi"en the meaning
deri"ed from the contract as a whole.
: /emar'7
3here rules o interpretation allo5 the court a great deal o reedom, the parties should 2e as precise
as possi2le.
3)3) A##li%a/le La0 of !he (on!ra%! &nder ((VN)
:Ar!i%le 434: Ci!il contracts
<. Forms of ci"il contracts shall be go"erned b' the law of the countr' where contracts are concluded. The
contracts that are concluded in a foreign countr' with "iolations of law governin' forms of contracts shall be
"alid in Vietnam if the form of those contracts does not "iolate the law of the 3ocialist 2epublic of Vietnam.
#. The rights and obligations of parties in a ci"il contract shall be determined b' the law of the countr' where
performance of the contract takes place.
The contracts that are concluded and performed wholl' in Vietnam shall be go"erned b' the law of the
3ocialist 2epublic of Vietnam.
If the place of performance of a contract is not indicated then the place of performance shall be determined
b' the law of 3ocialist republic of Vietnam.
3. The ci"il contract ha"ing has immo"able propert' in Vietnam as its subKect@matter shall be go"erned b' the
law of the 3ocialist 2epublic of Vietnam.
: /emar'7
3rticle >34 is in nee of clarification by the courts.
3)4) A##li%a/le La0 of !he (on!ra%! &nder !he Model (on!ra%!)
.) A##li%a/le la0
This contract and all !uestions relating to its formation "alidit' interpretation or performance shall be go"erned
b' the law or....................
!Note% #he subclause below is optional&.
This contract9 shall not include incorporate or be subKect to the pro"isions of the 95nited Nations 4on"ention on
4ontracts for the International 3ale of 7oods. H
: /emar'
The &odel Contract assumes reedom o contract in choosing an applica2le la5. +t also allo5s8or
exclusion o the %ienna Sales Con!ention.
3)5) S%o#e of (on!ra%!: Te%hni%al S#e%ifi%a!ion"
Notes for preparing the Technical 3pecification
) set of precise and clear specifications is@a prere!uisite for bidders to respond realisticall' and competiti"el' to
the re!uirements of the 1urchaser without !ualif'ing their bids. In the
conte%t of International 4ompetiti"e Cidding AI4CB the specifications must be drafted to permit the widest
possible competition and at the same time present a clear statement of the re!uired standards of
workmanship materials and performance of the goods and ser"ices to be procured. -nl' if this is done will be
obKecti"es of econom' efficienc' and fairness in procurement be realised responsi"eness of bids be ensured
and the subse!uent task of bid e"aluation facilitated. The specifications should re!uire that all goods and
materials to be incorporated in the goods be new unused and of the most recent or current models and that
the' incorporate all recent impro"ements in design and materials unless
pro"ides for otherwise in the contract ...
4are must be taken in drafting specifications to ensure that the' are not restricti"e. In the specification of
standards for e!uipment materials and workmanship recognised international standards should be used as
much as possible. $here other particular
standards are used whether national standards of the CorrowerHs countr' or other standards the specifications
should state that e!uipment materials and workmanship that meet other authoritati"e standards and which
ensure at least a substantiall' e!ual !ualit' than the standards mentioned will also be acceptable. H
6ource% Aorl 4an* 6tanar . 4iin'= .ocument% Procurement of 9oos, p. B5.
: /emar'7 Technical speciications must 9 2e prepared to allo5 a2solute
certainty as to the scope o contract,
3)6) Leal +a'ilie" and !he A##li%a/le La0
W The total agreement between the parties is their written contract Athe fishB plus the applicable pri"ate law Athe
waterB
W In principle the parties to a contract are free to decide the pri"ate law that will supplement their contractJ i.e.
the parties are free to choose the water their fish swims in.
W Each countr' has its own national law. These laws belong to one of three families.
@ The 4i"il +aw Famil'6 legal s'stems based on codified laws. The aim is consistenc' and predictabilit'. The
Kudge applies the written law. E%amples6 France 7erman' 3pain.
@ The 4ommon +aw Famil'6 legal s'stems aimed at achie"ing the most Kust result in the indi"idual case. There
is no written law @ onl' precedents to guide decision@
making. E%amples6 England 5nited 3tate .ala'sia.
@ The 2eligious +aw Famil'6 legal s'stems based on .oslem principles. For contracts there laws tend to adopt
international common law or ci"il law principles.
E%amples6 3audi )rabia 1akistan.
3)7) The Vienna Sale" (on1en!ion ))
@ The 5nited Nations .4on"entions on 4ontracts for the International 3ale of 7oods AThe Vienna 3ales
4on"entionB is the law of an' countr' that adopts it. $here the 4on"ention
conflicts with e%isting national law the 4on"ention pre"ails.
W The 4on"ention applies to international sales onl'. (
@ The parties to a contract can 9opt out9 of the 4on"ention with a clause such as6
This contract and all !uestions concerning its "alidit' interpretation and performance shall be go"erned b' the
law of the 2epublic of Verbena. This contract shall not include incorporate or be subKect to the pro"ision of the
95nited Nations 4on"ention on
4ontracts for the International 3ales of 7oods9.
W .an' !uestions about the meaning of the 4on"ention must be answered in the courts. 3o far the answers
ha"e been slow in coming.
@ E"en so the importer might wish to accept the 4on"ention if the law applicable to the contract is weak or
underde"eloped or if it fa"ours the seller too strongl'.
3)4) Re;&ire'en! !o #ro1ide a <"er=" -&ide)
: Ar!i%le 435: O2ligations to pro!ide inormation and :ser.s ;uide.
The seller is bound to pro"ide the purchaser with necessar' information on the assets sold and guidelines for
using those assets. If the seller fails to perform this obligation the purchaser shall ha"e the right to re!uest the
seller to perform the obligationJ If the seller still does not perform it the purchaser shall ha"e the right to annul
the contract and claim for compensation of damages.
Y 5emar*%
The 2uyer.s right to annulment or ailure to produce a user.s guide 5ould not normally 2e accepta2le
in a seller.
<E=
3)5) Tran"fer of Ri">3 Tran"fer of Ti!le)
: =Ar!i%le 432: &oment o Transer o the O5nership
<B The ownership o"er purchased items shall pass to the purchaser from the moment when the purchaser
recei"es the obKect e%cept for cases where parties agree or law
stipulates otherwise.
: Ar!i%le 43: &oment o Passage o /is'.
1. The seller part' shall bear risks regard of the sold assets until the moment when assets are deli"ered to
the purchaser and the latter shall bear risks from the moment of recei"ing assets if parties ha"e not agreed
otherwise.
: /emar'7
The concepts o <deli!er=.< and <receipt< 5ill re>uire some deinition 2y the courts. :nder an +ncoerm
contract, 2oth terms could mean deli!ery.
3).0) Tran"fer of Ri"> and Ti!le &nder !he Model (on!ra%!)
>. &eli"er'
>.<. &ate 1lace and Terms of &eli"er'
&eli"er' of the 7oods shall be made ............... The scheduled date of &eli"er' shall be ................ 2isk and title
to the 7oods
W shall pass from the 3E++E2 !o !he C5/E2 on &eli"er'.
/emar'7 Transer o ris' and title .together is oten the simplest arrangement.
3)..) Pla%e of $eli1er2 &nder ((VN and &nder !he Model (on!ra%!)
: Ar!i%le 426: Place o Deli!ery o $ssets
1arties shall agree upon the place of deli"er' of assetsJ If there are no agreement on this then the pro"ision of
)rticle @#L= Zresidence or head!uarters of Cu'er[ of this 4ode shall be applied.
The place of &eli"er' under this 4ontract is .............................J>
>. )greed place of deli"er'. Note6 In F-C F42 4IF and 4I1
AetcB contracts this is the portIplace of shipment
./emar'7
Place o Deli!ery should 2e stated. +n C8term contracts it is the port o shipment, not the port o arri!al.
,.1". Time of $eli1er2 &nder ((VN and &nder !he Model (on!ra%!)
: Ar!i%le 425: Time o perormance o a Sale Contract
<. The time for performance of a sale contract shall be agreed upon b' parties. The seller must deli"er the
assets to the purchaser at the time as agreed. The seller can deli"er the
assets before the Fi%ed time onl' if the purchaser agrees.
In cases where parties do not fi% the time for deli"er' of assets the purchaser shall ha"e the right to re!uest the
seller to deli"er assets and the seller shall ha"e the rights to ask the purchaser to recei"e assets at an' time
pro"ided that parties shall inform to each other within a reasonable period of time and pro"ided further that
parties do not ha"e other agreements.
#. If parties ha"e not agreed upon a. term of pa'ment the purchaser shall ha"e to pa' upon receipt of the
assets.
>. &eli"er'
>.<. &ate 1lace and Terms of &eli"er'
&eli"er' of the 7oods sliall lAe made ......
The scheduled date of &eli"er' shall /e
C5emar*% C= .. .
+t is essential to clariy the time o deli!ery. Late deli!ery has important inancial conse>uences. The
5arranty period usually 2egins to run rom deli!ery.
3).3) +or%e Ma8e&re &nder ((VN and &nder !he Model (on!ra%!)
= : Ar!i%le 304: Ci!il lia2ility due to 2reach o ci!il o2ligations.
1. The obligor who fails to fulfil improperl' the o/lia!ion3 shall bear ci"il liabilit' to the obligor.
#. The obligor who cannot fulfils the obligation due to force maKeure e"ents shall not bear ci"il liabilit' unless
otherwise pro"ided for b' agreements or stipulated b' the law.
.7) +or%e Ma8e&re
If either part' is pre"ented from or dela'ed in performing an' dut'Y under this 4ontract b' an e"ent be'ond his
reasonable control then this e"ent shall be deemed force maKeure and this part' shall not considered in default
and no remed' be it under this 4ontract or otherwise shall be a"ailable to the other part'.
ZN-TE6 The subclause below contains e%amples onl'. It should be .odified as necessar'[.
Force maKeure e"ent include but are not limited to6 war Awhether war is declared or notB riots insurrections
acts of sabotage or similar occurrenceHsJ strikes or other labor unrest6
newl' introduced laws or 7o"ernment regulationsJ dela' due to 7o"ernment action or inaction or inaction on
the part of an' inspection agenc' fire e%plosion or other una"oidable accidentJ flood storm earth!uake or
other abnormal natural e"ent.
DN"#$% #he subslause below on C non ? force =:a@eure events is optionalE
Force .aKeure e"ents do not include
If either part' is pre"ented from or dela'ed in performing an' dut'Y under this 4ontract then this part' shall
immediatel' notif' the other part' of the e"ent of the dut'Y affected and of the e%pected duration of the e"ent.
If an' force .aKeure e"ent pre"ents or dela's performance of an' dut'Y under this 4ontract for more than ... #
da's then either part' ma' on due notification to the . other part'
terminate this 4ontract.
: /emar'7
:
Forced &a?eure need details negotiation.
3).4) Penal!ie" and Li;&ida!ed $a'ae" &nder ((VN
: Ar!i%le 377: Puniti!e damages.
<. 1uniti"e damages is measure that shall be applied b' the agreement or the parties or b' law to secure the
fulfillment of an obligation b' which the defaulting part' must pa' an
amount of mone' to the inKured part'.
#. )n agreement or puniti"e damages must be filed in an act which ma' be .separated from included into the
main contract.
: Ar!i%le 374? /ate o puniti!e damages.
The rate of puniti"e damages ma' be a certain sum of mone' or ma' be terminated b' percentage of the "alue
of the breached part of the obligation but must not e%ceed >\.
Ar!i%le =375: /elationship 2et5een puniti!e damages and compensatory damages. =
<. The parties ma' agree upon that the defaulting part' shall ha"e to pa' onl' puniti"e damages but not
compensator' damages or both either puniti"e damages and
compensator' damagesJ 9 if the rate of compensator' damages was not agreed upon in ad"ance the
entire damages must be compensated.
#. If the parties ha"e agreed upon the choice between puniti"e damages or compensator' damages the right to
choose shall be granted to the inKured part'.
3. In case where puniti"e da infi%es rather compensator' damages ha"e been agreed upon b' the parties or
stipulated b' law the defaulting part' must pa' onl' puniti"e damages.
: /emar'7
The 5@ rate or puniti!e damages is stringent is, 2ut it is unclear.
The possi2le o paying 2oth compensatory and puniti!e damages is
highly unattracti!e to the seller7 e5 contracts 5ill allo5 it.
3).5) Li;&ida!ed da'ae" &nder !he Model (on!ra%!
4)3) Delay in Deli!ery
Y In the e"ent of late &eli"er' for reason other than force maKeures defined in 4lause <S below the 3E++E2
shall pa' as li!uidated damages and not as a penalt' the sum of
]FI752E^and of the "alue of the undeli"ered part per &a' of late &eli"er' up to a ma%imum of ]FI752E^ and
of the 1rice pa'able 4lause = below. 1a'ment of li!uidated damages shall be due without the C5/E2Hha"ingHto
furnish proof of an' loss damage or inKur'.
ZN-TE6 rIic too subclauses below are alia?natives.F 9
1a'ment of li!uidated damages shall constitute full and complete satisfaction of an' claim of the. C5/E2
against the 3E++E2 arising from or in connection with late &eli"er' of an' 7oods. In particular the 3E++E2
shall not be liable for an' indirect or conse!uential loss or damage as defined in 4lause #.S abo"e arising
from or in connection with late &eli"er' of an' 7oods.
1a'ment of li!uidated damages b' the 3E++E2 shall not preclude the C5/E2 from seeking compensator'
damages from the 3E++E2 for an' loss inKur' or damage arising from or in
connection with late &eli"er' of an' 7oods. In particular the C5/E2 shall be entitled to compensation from the
3E++E2 for an' indirect or conse!uential loss or damage including but not limited to loss of profitJ loss of use
or loss of contract arising from or in connection with late &eli"er' of an' 7oods. ,owe"er pa'ments made as
li!uidated damages shall be offset against an' compensator' damages reco"ered from the 3E++E2 for the late
&eli"er' of and 7oods.
4)4) Ter'ina!ion for $ela2
In the e"ent that the 3E++E2 becomes liable to pa' the ma%imum sum pa'able as li!uidated damages under
4lause L.3 abo"e then the dela' shall be deemed breach of contract and the
C5/E2 ma' upon due notice terminate the 4ontract andIor seek an' other remed' a"ailable to him.
/emar'7
+n practice, e5 sellers 5ill accept $lternati!e "A it goes against the principle o li>uidated damages.
3).6) $efe%!i1e $eli1er2 &nder ((VN
: Ar!i%le 424: Lia2ility or deli!ery o assets in improper >uantiy
<. In cases where the seller deli"ers things in !uantit' e%ceeding that outnumbered the !uantit' which has been
agreed upon the purchaser shall ha"e the right to refuse the e%cess or to recei"e it and pa' for it at agreed
price.
#. In cases the seller part' deli"ers things in !uantit' less than the !uantit' which has been agreed upon
the purchaser shall ha"e either of following rights.
a. To terminate the contract and re;&e"! compensation for damages.
b. To recei"e the !uantit' which 0a" deli"ered and re!uest compensation for damages. .
c. To recei"e what has been deli"ered and e%tend a period of time for the seller to deli"er !he re"!)
: Ar!i%le 425: Lia2ility due to Deli!ery o +ncompleted Things.
<. In cases where things which ha"e been deli"ered are not completed and thus causing the usefulness to be
failed the purchaser shall ha"e either of following rights6
a. To cancel the contract and re!uest compensation for damages6
b. To recei"e what has been deli"ered and ask the seller part' to deli"er component or parts which ha"e
not been deli"ered and to re!uest compensations for damages and to
suspend the pa'ment until the things becomes complete.
: Ar!i%le 430: Lia2ility or deli!ery o things o the 3rong category.
In case where the things@ha"e... been .deli"ered in improper Zassortment[ the purchaser shall ha"e
either of the following rights
<. To terminate the contract and re!uest compensation for damages.
#. To recei"e what has been deli"ered an' pa' for it at the price as agreed upon b' parties. H
3. To re!uest the seller to deli"er Wtbinp in proper assortment.
/emar'7 3
The 2uyer.s right to terminate is !ery hard on the seller. These clauses are Bpro2a2lyC disposi!e,
ho5e!er. Some 5ording on undamental 2reach is necessary in the contract.
3).7) $efe%!i1e $eli1er2 &nder !he Model (on!ra%!)
..)3) 4uyer=s ri' fits in the event of .iscrepancy in 8uantity= .
If a material discrepanc' in !uantit' e%ists and is dul' noticed to the 3E++E2 the C5/E2 hi. his discretion and
subKect to clause L.# abo"e ma' either.
a. )ccept the deli"ered portion of the 7oods and re!uired the 3E++E2 to deli"er the remaining portions
forthwithJ or
b. )ccept the deli"ered portion of the 7oods and terminal of the remaining portion of the 4ontract upon the due
notice gi"en to the 3E++E2.
If an' material discrepanc' in !uantit' e%ists such that ]3T)TE.ENT -F F5N&).ENT)+ &I342E1)N4/^
and if such discrepanc' is dul' notified to the 3E++E2 the C5/E2
ma' at his discretion.
a. )dopt either of the remedies prescribed in tins clause abo"eJ
or
b. 2eKect the dcli"ored portion of the 7oods and reco"er from the 3E++E2 all pa'ments made to the 3E++E2
as well as all costs e%penses and customs duties incurred b' the C5/E2 in association with the shipment
mo"ement through customs insurance or storage of the 7oods.
..)4) -uyer.s rights in the e!ent Discrepancy in >uality
&iscrepancies in !ualit' shall be considered as defects and shall gi"e rise to claims under the &efects +iabilit'
pro"ision of this 4ontract in 4lause <# below.
,owe"er a fundamental discrepanc' in !ualit' shall gi"e the C5/E2 the right to refuse &eli"er' of the 7oods
in whole or in part and to reco"er from the 3E++E2 all pa'ments made for the TT and customs duties incurred
b' the C5/E2 in association with the shipment mo"ement through customs. Insurance co"erage of the
unaccepted portion the 7oodsIFurther a refusal to accept deli"er' in whole shall be considered termination
under 4lause <L of this 4ontract and refusal to accept deli"er' in part shall be considered termination of that
part of the 4ontract affected b' such refusal.
/emar'7
The 5ording on. undamental 2reach is a necessary protection or the seller. +t is essential or the 2uyer
to 2e air to the seller or he 5ill simply reuse to do 2usiness.
3.<L. &efect liabilit' under 44VN
W )rticle *3S6 9uarantee of the Guality of 9oos.
<. The. seller shall guarantee the fitness and characteristics of things soldJ If the purchase disco"ers in the
purchased things the defects which de"aluated it decreases its fitness of heIshe must immediatel' notif' the
seller thereof and shall ha"e the right to re!uest the seller to repair or to replace the things with the defects or
to reduce price and to compensate for damages if parties ha"e not agree otherwise.
#. The sale part' shall guarantee that things sold are in accordance with description on co"ers -r appropriate
with the sample that has been chosen b' the purchaser.
3. The sale part' shall not be liable for defects in the following cases6
AaB &efect that the purchase part' ha"e alread' known and must ha"e known when bu'ing.
AbB Things at auctionJ things second hand tradeJ
AcB The purchase part' at fault of causing defect to things.
: Ar!i%le 434: 3arranty o2ligation
The sale part' shall ha"e warrant' obligation to things sold for a period of time to be called warrant' period if
the warrant' is agreed upon b' parties or stipulated b' +aw. The
warrant' period shall be calculated from the time the purchase part' has to recei"e things.
W )rticle *3=. 5i'ht to re8uest for Dremey of .efect unerE warranty
&uring the warrant' period if the purchase part' disco"ers an' defects on things it shall ha"e the right to
re!uest the sale part' to repair things free of charge or to reduce the price
or to e%change the things with defects for the others or to return things and recei"e back the mone'.
: /emar'7
The correct 5ord is <5arranty<
The 5arranty period appears to run ore!er unless other5ise regulated 2y the contract.
The 2uyer has the right to choose the remedy 5hich is grossly unair to the seller.
3.<=. &efect +iabilit' &nder !he Model (on!ra%!)
<#. &efects liabilit'
1".1. Seller.s Lia2ility or deects
The 3E++E2 warrants that the 7oods supplied under this 4ontract shall at the date of their &eli"er'.
a. Ce free defects in material.
b. Ce free from defects in workmanshipJ
c. Ce free from defect inherent in design including but not limited to selection of materials and be fit for the
purpose for which such 7oods are normall' used.
If an' defect pro"abl' present it an' of the 7oods on the date of &eli"er' comes to light during the defects
liabilit' period then the C5/E2 shall forthwith notif' the 3E++E2. The 3E++E2 without undue dela' shall at
his own risk and cost and at his discretion repair or replace such item or otherwise make goods the defect.
The 3E++E2H3 liabilit' for defects is subKect to the C5/E2 ha"ing adhered to all procedures and instruction
applicable to the .... of the item and e%pressl' e%cludes damages to the 7oods caused b' fair wear and tear or
b' misuse occurring after &eli"er'.
1.".". Deects Lia2ility period
The 3E++E2 shall be liable for defect which come to light during a period of ........... da's from ..... )fter the end
of this period the C5/E2 shall ha"e no right to raise claims of an' kind against the 3E++E2 for an' defect in
an' 7oods of the 3E++E2H3 suppl'.
The defect liabilit' period shall be prolonged b' the length of an' period during which the 7oods cannot be
used b' the Cu'er because of a defect. ,owe"er it new 7oods are deli"ered to replace defecti"e 7oods the
defects liabilit' period shall not begin again on
the replacement 7oods.
1.".,. Limitation o Deects Lia2ility.
ZN-TE6 #he two clauses below are alternatives. .elete as necessaryE
The dut' to repair and replace or otherwise to make good defects is the onl' dut' of the 3E++E2 in the e"ent of
the &eli"er' of defecti"e 7oods. In particular the C5/E2 shall not entitled to compensation from the 3E++E2
for an' indirect loss or damage as defined in 4lause #.S abo"e arising from or in connection with &eli"er' of
defecti"e 7oods.
The 3E++E2 shall indemnif' and hold harmless the C5/E2 against an' loss or damage howe"er arising
whether direct or indirect which shall be suffered b' the C5/E2 as the result of defecti"e or fault' 7oods
deli"er' b' the 3E++E2.
3)20) Pa2'en! &nder 44VN and !he Model (on!ra%!
: Ar!i%le 255: Fulilling the o2ligation o paying money.
<. The obligation to pa' mone' shall be fulfilled in full according to the time limit at the appointed place and in
the agreed upon procedures.
#. The mone' that must be paid shall be the Vietnamese &ong e%cept in cases where the law stipulates
otherwise.
: Ar!i%le 424: Price and &odes o Payment
3. .odes of pa'ments shall be agreed upon b' parties or stipulated b' law.
: /emar'7
The re>uirement to pay all monies in Dong needs interpretation
UNITED NATIONS CON7ENTION ON
CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
The ;tates (arties to this Con&entionF
4e"%ing !t%ong 0in the 4road o4Se)ti&e in the
reso%/tion adopted 4' the sixth spe)ia% sesssion
of the Renera% Assem4%' of the 9nited #ations on
the esta4%ishment of a #e5 +nternationa%
E)onomi) :rderT
Con!ie%ing th"t the de&e%opment of
internationa% trade on the 4asis of eJ/a%it' and
m/t/a% 4enefit is an important e%ement in
promoting friend%' re%ations among ;tatesT
Being of the o3inion th"t the adoption of
/niform r/%es 5hi)h go&ern )ontra)ts for the
internationa% sa%e of goods and tae into a))o/nt
the different so)ia%F e)onomi) and %ega% s'stems
5o/%d )ontri4/te to the remo&a% of %ega% 4arriers
in internationa% trade and promote the
de&e%opment of internationa% trade!
H"$e "g%ee "! fo##o5!
C<NG =>C LH? 7@ HAP BCNG MUA
BDN HENG HFA ?T
CB) nhx) thAnh &i>n )qa Cjng hx)
nA'F
Coi t%Gng nhng mp) ti>/ tng J/Bt )qa
)B) nghm J/'\t &l thi\t %np m=t trnt ti
inh t\ J/^) t\ mxi ah`) gi Q=i bng
,QQ )hep nhnn trong hca hp 4et
thh}ng %[n ths 3F
XHt %Ing si phBt trin thh@ng mgi J/^)
t\ tr>n )@ s 4knh angF aji 4>n )ung
)c %`i %A m=t '\/ t^ J/an trng th) a'
J/an h] h/ nghm gia )B) J/^) giaT
Cho %Ing &i]) )hep nhnn )B) J/i tw)
th^ng nhet )hi ph^i )B) m^i J/an h]
trong m/a 4Bn hAng hca J/^) t\ &A )c
tdnh a\n )B) h] th^ng x h=i inh t\ &A
phBp %_ trong thh@ng mgi J/^) t\ &A h
tr` )ho &i]) phBt trin thh@ng mgi J/^)
t\F
BJ thK" th-+n nhLng Mi.0 !"-
A%ti,#e 1
1! This Con&ertion app%ies to )ontra)ts of sa%e of
goods 4et5een parties 5hose p%a)es of 4/siness
are strong different ;tates:
(a) Khen the ;tates are Contra)ting ;tatesT or
(4) Khen the r/%es of pri&ate internationa% %a5
%ead to the app%i)ation of the %a5 of a Contra)ting
;tate
"! The fa)t that the parties ha&e their p%a)es of
4/siness in different ;tates is to 4e disregarded
5hene&er this fa)t does not appear either from
the )ontra)t or from an' dea%ings 4et5eenF or
from information dis)%osed 4'F the parties at an'
time 4efore or at the )on)%/sion of the )ontra)t!
3! #either the nationa%it' of the parties nor the
)i&i% or )ommer)ia% )hara)ter of the parties or of
the )ontra)t is to 4e taen into )onsideration in
determining the app%i)ation of this Con&ention!
A%ti,#e '. This Con&ention does not app%' to
sa%es
(a) :f goods 4o/ght for persona%F fami%' or
ho/seho%d /seF /n%ess the se%%erF at an' time
4efore or at the )on)%/sion of the )ontra)tF
neither ne5 nor o/ght to ha&e no5n that the
goods 5ere 4o/ght for an' s/)h /seT
(4) .' a/)tionT
()) :n exe)/tion or other5ise 4' a/thorit' of %a5T
(d) :f sto)sF sharesF in&estments se)/ritiesF
negotia4%e instr/ments or mone'T
(e) :f shipsF &esse%sF ho&er)raft or air)raftT
(f) :f e%e)tri)it'!
BiN- 1
1! Cjng hx) nA' Bp dpng )ho nhng
h`p abng m/a 4Bn hAng hca gia )B)
4>n )c trp s thh@ng mgi tgi )B) J/^)
gia hB) nha/
a! Hhi )B) J/^) gia nA' %A thAnh &i>n
)qa Cjng hx)F ho)
4! Hhi %/nt ah`) Bp dpng %A %/nt )qa
nhx) thAnh &i>n Cjng hx) nA' theo )B)
J/' tw) th phBp J/^) t\!
"! Vi]) )B) 4>n )c trp s thh@ng mgi tgi
)B) J/^) gia hB) nha/ hjng tdnh a\n
hi &en al nA' hjng x/et phBt t h`p
abngF t )B) m^i J/an h] a hknh thAnh
ho) &Ao th}i aim _ h`p abng gha
)B) 4>n ho) t &i]) trao ai thjng tin
gia )B) 4>n!
3! Q/^) tm)h )qa )B) 4>nF J/' )h\ dCn
si ho) thh@ng mgi )qa hF tdnh )het
dCn si ha' thh@ng mgi )qa )B) 4>n ha'
)qa h`p abngF hjng ah`) xyt txi hi
xB) amnh phgm &i Bp dpng )qa Cjng
hx) nA'!
BiN- '. Cjng hx) nA' hjng Bp dpng
a^i &xi giao dm)h m/a 4Bn
a) )B) hAng hoB dung )ho )B nhCnF gia
aknh ho) n=i tr`F tr hi ngh}i 4BnF &Ao
4et )s %) nAo trong th}i gian trhx)
ho) &Ao th}i aim _ \t h`p abngF
hjng 4i\t ho) hjng )[n ph?i 4i\t
rtng hAng hca a ah`) m/a a sz
dpng nhh th\T
4) .Bn ae/ giBT
)) thi hAnh %/nt ho) &on i]n q'
thB) theo %/ntT
d) C phi\/F ) ph[nF )hsng hoBn a[/
thF )B) )hsng t )c th )h/'n nhh`ng
ho) tiln t]T
e) TA/ thq'F mB' 4a' &A tA/ )hg' tr>n
a]m hjng hdT
f) i]n nong
A%ti,#e (
1! Contra)ts for the s/pp%' of goods to 4e
man/fa)t/red or prod/)ed are to 4e )onsidered
sa%es /n%ess the part' 5ho orders the goods
/ndertaes to s/pp%' a s/4stantia% part of the
materia%s ne)essar' for s/)h man/fa)t/re or
prod/)tion!
"! This Con&ention does not app%' to )ontra)ts in
5hi)h the preponderant part of the o4%igations of
the part 5ho f/rnishes the goods )onsists in the
s/pp%' of %a4o/r or other ser&i)es!
A%ti,#e )! This )on&ention go&erns on%' the
formation of the )ontra)t of sa%e and the rights
and o4%igations of the se%%er and the 4/'er arising
from s/)h a )ontra)t! +n parti)/%arF ex)ept as
other5ise express%' pro&ided in this Con&entionF
it is not )on)erned 5ith:
(a) The &a%idit' of the )ontra)t or of an' of its
pro&isions of an' /sageT
(4) The effe)t 5hi)h the )ontra)t ma' ha&e on the
propert' in the goods so%d!
A%ti,#e * This Con&ention does not app%' to the
%ia4i%it' of the se%%er for death or persona% inS/r'
)a/sed 4' the goods to an' person!
A%ti,#e O The parties ma' ex)%/de the
app%i)ation of this Con&ention orF s/4Se)t to
Arti)%e 1"F derrogate from or &ar' the effe)t of an'
of its pro&isions!
PART III. SALE OF GOODS
Ch"3te% I! GENERAL PRO7ISION
A%ti,#e '* A 4rea)h of )ontra)t )ommitted 4'
oneF of the parties is f/ndamenta% if it res/%ts in
s/)h detriment to the other part' as s/4stantia%%'
to depri&e him of 5hat he is entit%ed to expe)t
/nder the )ontra)tF /n%ess the part' in 4rea)h did
not foresee and a reasona4%e person of the same
)ir)/mstan)es 5o/%d not ha&e foreseen s/)h a
res/%t!
A%ti,#e 'O A de)%aration of a&oidan)e of the
)ontra)t is effe)ti&e on%' if made 4' noti)e to the
other part'!
A%ti,#e 'P 9n%ess other5ise express%' pro&ided in this
(art of the Con&ention if an' noti)eF reJ/est or other
)omm/ni)ation is gi&en or made 4' a part' in a))ordan)e
5ith this (art and 4' means appropriate in the
)ir)/mstan)esF a de%a' or error in the transmission of the
)omm/ni)ation or its fai%/re to arri&e does not depri&e
that part' of the right to re%' on the )omm/ni)ation
A%ti,#e '8 +fF in a))ordan)e 5ith the pro&isions of
this Con&entionF one part' is entit%ed to reJ/ire
performan)e of an' o4%igation 4' the other part'F
a )o/rt is not 4o/nd to enter a S/dgement for
spe)ifi) performan)e /n%ess the )o/rt 5o/%d do
so /nder its o5n %a5 in respe)t of simi%ar
)ontra)ts of sa%e not go&erned 4' this
PHQN (/ MUA BDN HENG HFA
ChRSng 1/ NhLng T-& MUnh ,h-ng
BiN- '*. ;i &i phgm h`p abng do mj t
4>n gC' ra %A &i phgm )@ 4?n n\/ &i
phgm ac %Am )ho 4>n ia 4m thi> t hgi mA
ngh}i 4m thi> t hgi trong mj t )hng mi)
aBng 4m met nhng gk mA h ah`)
phyp )c theo h`p abngF tr phi 4>n &i
phgm hjng ti>n %i> / ah`) hC / J/? ac
&A mj t ngh}i )c %_ trd minh m|n )~ng s
hjng ti>n %i>/ ah`) n\/ &Ao hoAn
)?nh th@ng ti!
BiN- 'O. Mjt %}i t/'>n 4^ &l &i>) hq'
h`p abng )hf )c hi> / %i) n\/ ah`)
thjng 4Bo )ho 4>n ia 4i\t!
BiN- 'P. Tr phi (h[n ++ )qa Cjng hx)
nA' )c J/' amnh hB)F n\/ thjng 4Bo
'>/ )[/ ha' thjng tin hB) a ah`)
thi) hi> n 4i mj t 4>n )qa h`p abng
theo (h[n +++ nA' &A 4tng mj t phh@ng
ti> n thd)h h`p &xi hoAn )?nhF thk si
)hC m tr hoo ) %[m %|n trong &i>)
)h/'n giao thjng tin hoo ) thjng tin
hjng a\n ngh}i nhC nF )~ng s %Am
4>n ac met J/'ln &i>n d|n )B) thjng
tin )qa mknh!
BiN- '8. #\/ mj t 4>n )c J/'ln '>/ )[/
Con&ention!
A%ti,#e 'V
1! A )ontra)t ma' 4e modified or terminated 4'
the mere agreement of the parties!
"! A )ontra)t in 5riting 5hi)h )ontains a pro&ision
reJ/iring an' modifi)ation or termination 4'
agreement to 4e in 5riting ma' not 4e other5ise
modified or terminated 4' agreement! Qo5e&erF a
part' ma' 4e pre)%/ded 4' his )ond/)t from
asserting s/)h a pro&ision to the extent that the
other part' has re%ied on that )ontra)t!
4>n ia thi) hi>n thi hAnh mj t ngha &p
nAo ac thk )hi\/ theo )B) J/' amnh )qa
Cjng hx) nA' Ta Bn hjng 4m 4wt 4/j )
ph?i ra phBn J/'\t 4/j ) 4>n ia thi) si
thi) hi> n h`p abngF tr hi ta Bn ra
phBn J/'\t ac tr>n )@ s %/C t nhx)
mknh a^i &xi )B) h`p abng m/a 4Bn
th@ng ti hjng ah`) ail/ )hfnh 4i
Cjng hx) nA'!
BiN- 'V.
1! Mjt h`p abng )c th ah`) ail/
)hfnh ha' )hem dst 4tng th{a th/C n
a@n th/[n gia )B) 4>n!
"! Mjt h`p abng 4tng &on 4?n )hsa
aing mj t ail/ ho?n J/' amnh rtng mi
si sqa ai hoo) )hem dst h`p abng
ph?i ah`) )B) 4>n %Am 4tng &on 4?n thk
hjng th 4m sqa ai hoo ) )hem dst
theo th{a th/Cn gia )B) 4>n hoo) dhxi
mj t hknh ths) hB)! T/' nhi>n hAnh
aj ng )qa mj t 4>n )c th hjng )ho
phyp h &i>n d|n ail/ ho?n e' trong
)hng mi) mA 4>n ia )on )s &Ao hAnh
aj ng ac!
PART II. FORMATION OF THE CONTRACT
A%ti,#e 1).
1! A proposa% for )on)%/ding a )ontra)t addressed
to one or more spe)ifi) persons )onstit/tes an
offer if it is s/ffi)ient%' definite and indi)ates the
intension of the offer or to 4e 4o/nd in )ase of
a))eptan)e! A proposa% is s/ffi)ient%' definite if it
indi)ates the goods and express%' or imp%i)it%'
fixes or maes pro&ision for determining the
J/antit' and the pri)e!
"! A proposa% other than one! addressed to one or
more spe)ifi) persons is to 4e )onsidered mere%'
as an in&itation to mae othersF /n%ess the
)ontrar' is )%ear%' indi)ated 4' the person maing
the proposa%!
A%ti,#e 1*.
1! An offer 4e)omes effe)ti&e 5hen it rea)hes the
offeree!
"! An offerF e&en if it is irre&o)a4%eF ma' 4e
5ithdra5n if the 5ithdra5a% rea)hes the offeree
4efore or at the same time as the offer!
A%ti,#e 1O
1! 9nti% a )ontra)t is )on)%/ded an offer ma' 4e
re&oed if the re&o)ation rea)hes the offeree
4efore he has dispat)hed an a))eptan)e!
"! Qo5e&erF an offer )annot 4e re&oed:
(a) +f it indi)atesF 5hether 4' stating a fixed time
for a))eptan)e or other5iseF that it is irre&o)a4%eT
or
(4) +f it 5as reasona4%e for the offeree to re%' on
the offer as 4eing irre&o)a4%e and the offeree has
a)ted in re%ian)e on the offer!
A%ti,#e 1P An offerF e&en if it is irre&o)a4%eF is
terminated 5hen a reSe)tion rea)hes the offeror!
A%ti,#e 18
1! A statement made 4' or other )ond/)t of the
offeree indi)ating assent to an offer is an
a))eptan)e! ;i%en)e or ina)ti&it' does not in itse%f
amo/nt to a))eptan)e!
"! An a))eptan)e of an offer 4e)omes effe)ti&e at
the moment the indi)ation of assent rea)hes the
offeror! An a))eptan)e is not effe)ti&e if the
indi)ation of assent does not rea)h the offeror
BiN- 1*
1! Mjt thh )hAo hAng )c hi> / %i) hi nc
txi ah`) ngh}i ah`) )hAo hAng!
"! ChAo hAng du %A %ogi )hAo hAng
hjng hq' ngang &|n )c th 4m hq' 4{
n\/ thjng 4Bo &l &i>) hq' )hAo hAng
a\n &xi ngh}i ah`) )hAo trhx) hoo)
)ung mj t %) &xi )hAo hAng
BiN- 1O
1! Cho txi hi h`p abng ah`) giao \tF
ngh}i )hAo hAng &|n )c th rt %gi )hAo
hAngF n\/ thjng 4Bo &l &l &i>) rt %gi
ac txi n@i ngh}i ah`) )hAo hAng trhx)
hi ngh}i nA' gzi thjng 4Bo )hep nhC n
)hAo hAng
"! T/' nhi>n )hAo hAng hjng th 4m hq'
4{!
a) #\/ nc )hf rF 4tng )B)h en amnh mj t
th}i hgn a )hep nhC n ha' 4tng )B)h
hB) rtng nc hjng th hq' ngang!
4) #\/ ngh}i nhCn )oi )hAo hAng hjng
th hq' ngang %A h`p %_ &A a hAnh
aj ng theo )hil/ hhxng ac!
BiN- 1P! ChAo hAngF du %A %ogi hjng
hq' ngang s met hi> / %i) hi ngh}i
)hAo hAng nhC n ah`) thjng 4Bo &l
&i>) t )h^i )hAo hAng!
BiN- 18
1!
BiN- 1V
1!
BiN- 'W
1!
BiN- '1
1!
BiN- ''
1!
BiN- '(
1!
BiN- ')
1!
5ithin the time he has fixed orF if no time is fixedF
5ithin a reasona4%e timeF d/e a))o/nt 4eing
taen of the )ir)/mstan)es of the transa)tionF
in)%/ding the rapidit' of the means of
)omm/ni)ation emp%o'ed 4' the offerer! An
ora% offer m/st 4e a))epted immediate%' /n%ess
the )ir)/mstan)es indi)ate other5ise!
3! Qo5e&erF ifF 4' &irt/e of the offer or as a res/%t
of pra)ti)es 5hi)h the parties ha&e esta4%ished
4et5een themse%&es or of /sageF the offeree ma'
indi)ate assent 4' performing an a)tF s/)h as
one re%ating to the dispat)h of the goods or
pa'ment of the pri)eF 5itho/t noti)e to the offerorF
thee a))eptan)e is effe)ti&e at the moment the
a)t is performedF pro&ided that the a)t is
performed 5ithin the period of the time %aid do5n
in the pre)eding paragraph!
A%ti,#e 1V
1! A rep%' to an offer 5hi)h p/rports to 4e an
a))eptan)e 4/t )ontains additionsF %imitationsF or
other modifi)ations is a reSe)tion of the other and
)onstit/tes a )o/nter-offer!
"! Qo5e&erF a rep%' to an offer 5hi)h p/rports to
4e an a))eptan)e 4/t )ontains additiona% or
different terms 5hi)h do not materia%%' a%ter the
terms of the offer )onstit/tes an a))eptan)eF
/n%ess the offererF 5itho/t /nd/e de%a'F o4Se)ts
ora%%' to the dis)repan)' or dispat)hes a noti)e to
that effe)t! +f he does not so o4Se)tF the terms of
the )ontra)t are the terms of the offer 5ith the
modifi)ations )ontained in the a))eptan)e
3! Additiona% or different terms re%atingF among
other thingsF to the pri)eF pa'mentF J/a%it' and
J/antit' of the goodsF p%a)e and time of de%i&er'F
extent of one part'Ws %ia4i%it' to the other or the
sett%ement of disp/tes are )onsidered to a%ter the
terms of the offer materia%%'!
A%ti,#e 'W
1! A period of the time for a))eptan)e fixed 4' the
offeror in a te%egram or a %etter 4egins to r/n from
the moment the te%egram is handed in for
dispat)hF or from the date sho5n on the %etter orF
if no s/)h date is sho5nF from the date sho5n on
the en&e%ope! A period of time for a))eptan)e-
fixed 4' the offeror 4' te%ephoneF te%ex or other
means of instantaneo/s )omm/ni)ationF 4egins
to r/n from the moment that
the other rea)hes the offeree!
"! :ffi)ia% ho%ida's or non-4/siness da's
o))/rring d/ring the period for a))eptan)e are
in)%/ded in )a%)/%ating the period! Qo5e&erF if a
noti)e of a))eptan)e )annot 4e de%i&ered at the
address of the offeror on the %ast da' of the
period 4e)a/se that da' fa%%s on an offi)ia%
ho%ida' or a non-4/siness da' at the p%a)e of
4/siness of the offerorF the period is extended
/nti% the first 4/siness da' 5hi)h fo%%o5s!
A%ti,#e '1
1! A %ate a))eptan)e is ne&erthe%ess effe)ti&e as
an a))eptan)e if 5itho/t de%a' the offeror ora%%'
so informs the offeree or dispat)hes a noti)e to
that effe)t!
"! +f a %etter or other 5riting )ontaining a %ate
a))eptan)e sho5s that it has 4een sent in s/)h
)ir)/mstan)e that if its transmission had 4een
norma% it 5o/%d ha&e rea)hed the offeror in d/e
timeF the %ate a))eptan)e is effe)ti&e as an
a))eptan)e /n%essF 5itho/t de%a'F the offerer
ora%%' informs the offeree that he )onsiders his
offer as ha&ing %apsed or dispat)hes a noti)e to
that effe)t!
A%ti,#e '' An a))eptan)e ma' 4e 5ithdra5n if
the 5ithdra5a% rea)hes the offeror 4efore or at
the same time as the a))eptan)e 5o/%d ha&e
4e)ome effe)ti&e!
A%ti,#e '( A )ontra)t is )on)%/ded at the moment
5hen an a))eptan)e of an offer 4e)omes
effe)ti&e in a))ordan)e 5ith the pro&isions of this
Con&ension!
A%ti,#e ') 8or the p/rposes of this (art of the
Con&ensionF an offerF de)%aration of a))eptan)e
or an' other indi)ation of intension Vrea)hesV the
addressee 5hen it is made ora%%' to him or
de%i&ered 4' an' other means to him persona%%'F
to his p%a)e of 4/siness or mai%ing addressF to his
ha4it/a% residen)e!
Ch"3te% II. OBLIGATIONS OF THE SELLER
A%ti,#e (W. The se%%er m/st de%i&er the goodsF
hand o&er an' do)/ments re%ating to them and
transfer the propert' in goodsF as reJ/ired 4' the
)ontra)t and this Con&ention!
Se,tion I. De#i$e%& of the goo! "n
h"ning o$e% of o,-0ent!
A%ti,#e (1. +f the se%%er is not 4o/nd to de%i&er the
goods at an' other parti)/%ar p%a)eF his o4%igation
to de%i&er )onsists:
(a) +f the )ontra)t of sa%e in&o%&es )arriage of the
goods in handing the goods o&er to the first
)arrier for transmission to the 4/'erT
(4) +fF in )ases not 5ithin the pre)eding
s/4paragraphF the )ontra)t re%ates to spe)ifi)
goodsF or /nidentified goods to 4e dra5n from a
spe)ifi) sto) or to 4e man/fa)t/red or prod/)edF
and at that time of the )on)%/sion of the )ontra)t
the parties ne5 that the goods 5ere atF or 5ere
to 4e man/fa)t/red or prod/)ed atF a parti)/%ar
p%a)e - in p%a)ing the goods at the 4/'erWs
disposa% at that p%a)e!
()) +n other )ases in p%a)ing the goods at the
4/'erWs disposa% at the p%a)e 5here the se%%er had
his p%a)e of 4/siness at the time of the
)on)%/sion of the )ontra)t!
A%ti,#e ('. +f the se%%erF in a))ordan)e 5ith the
)ontra)t or this Con&entionF hands the goods
o&er to a )arrier and if the goods are not )%ear%'
identified to the )ontra)t 4' marings on the
goodsF 4' shipping do)/ments or other5iseF the
se%%er m/st gi&e the 4/'er noti)e of the
)onsignment spe)if'ing the goods!
1! +f the se%%er is 4o/nd to arrange for )arriage of
the goodsF he m/st mae s/)h )ontra)ts as are
ne)essar' for )arriage to the p%a)e fixed 4'
means of transportation appropriate in the /s/a%
terms for s/)h transportation!
"! +f the se%%er is not 4o/nd to effe)t ins/ran)e in
respe)t to the )arriage of the goodsF he m/stF at
the 4/'erWs reJ/estF pro&ide him 5ith a%% a&ai%a4%e
information ne)essar' to ena4%e him to effe)t
s/)h ins/ran)e!
A%ti,#e ((. The se%%er m/st de%i&er the goods:
(a) +f the date is fixed 4' or determina4%e from the
)ontra)tF on that dateT
(4) +f a period of time is fixed 4' or determina4%e
form the )ontra)tF at an' time 5ithin that period
/n%ess )ir)/mstan)es +ndi)ate that the 4/'er is to
)hoose a dateT or
()) +n an' other )aseF 5ithin a reasona4%e time
after the )on)%/sion of the )ontra)t!
A%ti,#e ()
+f the se%%er isI4o/nd to hand o&er do)/ments
re%ating to the goodsF he m/st hand them o&er at
the time and p%a)e and in the form reJ/ired 4'
the )ontra)t! +f the se%%er has handed o&er
do)/ments 4efore that timeF he ma'F /p to that
timeF )/re an' %a) of )onformit' in the
do)/mentsF if the exer)ise of this right does not
)a/se the 4/'er /nreasona4%e in)on&enien)e or
/nreasona4%e expense! Qo5e&erF the 4/'er
retains an' right to )%aim damages as pro&ided
for in this Con&ention!
UNITE$ NATIONS CONVENTION ON CONTRACTS FOR T1E
INTERNATIONA2 SA2E OF GOO$S
T*e States Parties to t*is 8onvention4
/ear!n3 sron3 4!nd t*e broad obGective in t*e resol2tion adopted b t*e
sixt* special session o0 t*e Aeneral /ssembl o0 t*e >nited -ations on t*e
establis*ment o0 a -ew International Economic =rder
"ons!der!n3 5a t*e development o0 international trade on t*e basis o0
eM2alit and m2t2al beneKt is an important element In promoting 0riendl
relations among StatesL
/e!n3 o6 5e o7!n!on 5a t*e adoption o0 2ni0orm r2les w*ic* govern
contracts 0or t*e international sale o0 goods and taEe into acco2nt t*e diNerent
social4 economic and legal sstems wo2ld contrib2te to t*e removal o0 legal
barriers in international trade and promote t*e development o0 international
trade.
5a8e a3reed as 6o##o9s
C:NG ;<C 21= V> 1?@ ABNG MUA BCN 1DNG 1EA =T
8Rc nSTc t*Un* viVn cWa 8Xng STc nU4
Co! rFn3 n*Yng mZc tiV2 t[ng M2Rt cWa cRc ng*\ M2]t v^ t*i]t l_p m`t n^n
tr_t ta Ein* t] M2bc t] mTi cSdc efi 6`i egng +6: c*hp n*_n trong E*ia *jp
bht t*Skng lln t*m (4
GH 5IJ sa p*Rt trinn t*Song mfi M2bc t] trVn co sp bqn* crng4 cXi bVn csng
ci ldi lU m`t ]2 tb M2an trjng t*tc cu M2an *v *Y2 ng*\ giYa cRc M2bc gia4
C5o rKn3 vivc c*hp n*_n cRc M2i twc t*bng n*ht c*i p*bi cRc mbi M2an *v trong
m2a bRn *Ung *ia M2bc t] vU ci txn* c]n cRc *v t*bng xy *`i Ein* t] vU p*Rp lz
trong t*Song mfi M2bc t] vU *[ trd c*o vivc p*Rt trinn t*Song mfi M2bc t]4
AL 5Ma 5NOn n5Pn3 Q!R4 saN .
@ART 1. S@1ERE OF A@@2ICATION AN$ GENARA2 @ROVISIONS
C5a7er I. S@1ERE OF A@@2ICATION
Ar!"#e 1
1. T*is 8onvertion applies to contracts o0 sale o0 goods between parties w*ose
places o0 b2siness are strong diNerent States<
!a$ P*en t*e States are 8ontracting StatesL or !b$
P*en t*e r2les o0 private international law lead to t*e application o0 t*e law o0 a
8ontracting State
2. T*e 0act t*at t*e parties *ave t*eir places o0 b2siness in diNerent States is to
be disregarded w*enever t*is 0act does not appear eit*er 0rom t*e contract or
0rom an dealings between4 or 0rom in0ormation disclosed b4 t*e parties at an
time be0ore or at t*e concl2sion o0 t*e contract.
F. -eit*er t*e nationalit o0 t*e parties nor t*e civil or commercial c*aracter o0
t*e parties or o0 t*e contract is to be taEen into consideration in determining t*e
application o0 t*is 8onvention.
A!SN 1
4! 8Xng STc nU Rp dZng c*o n*Yng *dp cgng m2a bRn *Ung *ia giYa cRc bVn
ci trZ sp t*Song mfi tfi cRc M2bc gia E*Rc n*a2
a. Q*i cRc M2bc gia nU lU t*Un* viVn cWa 8Xng STc4 *o{c
b. Q*i l2_t cSdc Rp dZng lU l2_t cWa nSTc t*Un* viVn 8Xng STc nU t*eo cRc M2
twc tS p*Rp M2bc t].
2! Vivc cRc bVn ci trZ sp t*Song mfi tfi cRc M2bc gia E*Rc n*a2 E*Xng txn* c]n
E*i vhn c^ nU E*Xng x2ht p*Rt t| *dp cgng4 t| cRc mbi M2an *v cy *qn* t*Un*
*o{c vUo t*ki cinm Ez *dp cgng b}Sa cRc bVn *o{c t| vivc trao c[i t*Xng tin
giYa cRc bVn.
:2bc t\c* cWa cRc bVn4 M2 c*] d~n sa *o{c t*Song mfi cWa *j4 txn* c*ht d~n sa
*a t*Song mfi cWa cRc bVn *a cWa *dp cgng4 E*Xng cSdc xt tTi E*i xRc c\n*
p*fm vi Rp dZng cWa 8Xng STc nU.
Ar!"#e %. T*is 8onvention does not appl to sales
!a$ =0 goods bo2g*t 0or personal4 0amil or *o2se*old 2se4 2nless t*e seller4 at
an time be0ore or at t*e concl2sion o0 t*e contract4 neit*er Enew nor o2g*t to
*ave Enown t*at t*e goods were bo2g*t 0or an s2c* 2seL
!b$ 7 a2ctionL
!c$ =n exec2tion or ot*erwise b a2t*orit o0 lawL
!d$ =0 clocEs4 s*ares4 investments sec2rities4 negotiable instr2ments or moneL
!e$ =0 s*ips4 vessels4 *overcra0t or aircra0tL
!0$ =0 electricit.
A!SN %. 8Xng STc nU E*Xng Rp dZng cbi vTi giao d\c* m2a bRn
a$ cRc *Ung *oR dsng c*o cR n*~n4 gia cqn* *o{c n`i trd4 tr| E*i ngSki bRn4 vUo
bht cm ltc nUo trong t*ki gian trSTc *o{c vUo t*ki cinm Ez E]t *dp cgng4 E*Xng
bi]t *o{c E*Xng cln p*i bi]t rng *Ung *ia cy cSdc m2a cn s dZng n*S t*]L
b$ 7Rn ch2 giRL
c$ en t*i *Un* l2_t *o{c vn Eivn W t*Rc t*eo l2_tL
d$ 8[ p*i]24 c[ p*ln4 c*mng E*oRn cl2 tS4 cRc c*mng t| lS2 t*Xng *o{c ti^n tvL
e$ TU2 t*W4 mR ba vU tU2 c*f trVn cvm E*Xng E*xL
0$ eivn nng
Ar!"#e '
1. 8ontracts 0or t*e s2ppl o0 goods to be man20act2red or prod2ced are to be
considered sales 2nless t*e part w*o orders t*e goods 2ndertaEes to s2ppl a
s2bstantial part o0 t*e materials necessar 0or s2c* man20act2re or prod2ction.
2. T*is 8onvention does not appl to contracts in w*ic* t*e preponderant part o0
t*e obligations o0 t*e part w*o 02rnis*es t*e goods consists in t*e s2ppl o0
labo2r or ot*er services.
A!SN '.
1. 8Rc *dp cgng c2ng chp *Ung *ia cSdc c*] bi]n *a sn x2ht cSdc coi lU *dp
cgng m2a bRn tr| E*i bVn c{t *Ung cam E]t c2ng chp p*ln lTn cRc ng2Vn liv2
cln t*i]t c*o vivc c*] bi]n *a sn x2ht *Ung *ia ci.
2. 8Xng STc nU E*Xng Rp dZng c*o cRc *dp cgng trong ci ci ng*}a vZ cWa bVn
c2ng chp *Ung c*W ]2 lU p*i t*ac *ivn m`t cXng vivc *o{c t*ac *ivn cRc d\c*
vZ E*Rc.
Ar!"#e 0. T*is convention governs onl t*e 0ormation o0 t*e contract o0 sale
and t*e rig*ts and obligations o0 t*e seller and t*e b2er arising 0rom s2c* a
contract. In partic2lar4 except as ot*erwise expressl provided in t*is
8onvention4 it is not concerned wit*<
!a$ T*e validit o0 t*e contract or o0 an o0 its provisions o0 an 2sageL
!b$ T*e eNect w*ic* t*e contract ma *ave on t*e propert in t*e goods sold.
A!SN 0. 8Xng STc nU c* ci^2 c*n* vivc Ez E]t *dp cgng m2a bRn vU cRc
M2^n vU ng*}a vZ cWa ngSki bRn vU ngSki m2a p*Rt sin* t| *dp cgng ci. Tr|
E*i ci M2 c\n* E*Rc cSdc nV2 trong 8Xng STc. 8Xng STc E*Xng liVn M2an c]n
a. 6iv2 lac cWa *dp cgng *o{c cWa bht cm ci^2 E*on nUo cWa *dp cgng *o{c
bht E t_p M2Rn nUo.
b. n* *Spng mU *dp cgng ci t*n ci cbi vTi M2^n sp *Y2 cRc *Ung *ia cy
bRn.
Ar!"#e * T*is 8onvention does not appl to t*e liabilit o0 t*e seller 0or deat* or
personal inG2r ca2sed b t*e goods to an person.
A!SN *. 8Xng STc nU E*Xng liVn M2an c]n trRc* n*ivm cWa ngSki bRn trong
trSkng *dp *Ung cWa ngSki bRn g~ t*ivt *fi v^ t*~n t*n *o{c lUm c*]t m`t
ngSki nUo ci.
Ar!"#e + T*e parties ma excl2de t*e application o0 t*is 8onvention or4
s2bGect to /rticle 124 derrogate 0rom or var t*e eNect o0 an o0 its provisions.
A!SN +. 8Rc bVn ci t*n E*Xng Rp dZng 8Xng STc nU *o{c4 t*eo ctng ei^2 124
E*Xng t*n lUm trRi vTi bht cm ci^2 E*on nUo cWa 8Xng STc *a sa c[i *iv2 lac
cWa ci^2 E*on ci.
C5a7er II. GENERA2 @ROVISIONS
Ar!"#e ,
1. In t*e interpretation o0 t*is 8onvention4 regard is to be *ad to its international
c*aracter and to t*e need to promote 2ni0ormit in its application and t*e
observance o0 good 0ait* in international trade.
2. :2estions concerning matters governed b t*is 8onvention w*ic* are not
expressl settled in it are to be settled in con0ormit wit* t*e general
principles on w*ic* it is based or 4 in t*e absence o0 s2c* principles4 in
con0ormit wit* t*e law applicable b virt2e o0 t*e r2les o0 private
international law.
A!SN ,.
1. Q*i gii t*xc* cRc 8Xng STc nU4 cln lS2 z c]n txn* c*ht M2bc t] cWa ni4 c]n
sa cln t*i]t p*i tng cSkng sa n*ht M2Rn trong vivc Rp dZng 8Xng STc vU t2~n
t*W trong t*Song mfi M2bc t].
2. 8Rc vhn c^ liVn M2an c]n cbi tSdng ci^2 c*n* cWa 8Xng STc nU mU E*Xng
M2 c\n* cZ t*n trong 8Xng STc s cSdc gii M2]t t*eo cRc ng2Vn twc c*2ng
mU t| ci 8Xng STc cSdc *qn* t*Un* *o{c n]2 E*Xng ci ng2Vn twc nU t*q c*i]2
t*eo l2_t cSdc Rp dZng t*eo M2 p*fm cWa tS p*Rp M2bc t].
Ar!"#e -
1. ,or t*e p2rposes o0 t*is 8onvention statements made b and ot*er cond2ct
o0 a part are to be interpreted according to *is intent w*ere t*e ot*er part
Enew or co2ld not *ave been 2naware w*at t*at intent was.
2. I0 t*e preceding paragrap* is not applicable4 statements made b and ot*er
cond2ct o0 a part are to be interpreted according to t*e 2nderstanding t*at a
reasonable person o0 t*e same Knd as t*e ot*er part wo2ld *ave *ad in t*e
same circ2mstances.
F. In determining t*e intent o0 a part or t*e 2nderstanding a reasonable person
wo2ld *ave *ad4 d2e consideration is to be given to all relevant circ2mstances
o0 t*e case incl2ding t*e negotiations4 an practices w*ic* t*e parties *ave
establis*ed between t*emselves4 2sages and an s2bseM2ent cond2ct o0 t*e
parties.
A!SN -.
1. VTi mZc cxc* cWa 8Xng STc nU4 t2Vn bb vU cRc* s dZng E*Rc cWa m`t bVn
cSdc gii t*xc* t*eo ctng z c\n* cWa bVn ci4 E*i bVn Eia cy bi]t *a E*Xng t*n
bi]t z c\n* h.
2. -]2 M2 c\n* nii trVn E*Xng cSdc Rp dZng t*q t2Vn bb vU cRc* x sa E*Rc
cWa m`t bVn cSdc gii t*xc* t*eo ng*}a mU m`t ngSki ci lz trx4 n]2 ngSki ci
cSdc c{t vUo v\ trx cWa p*xa bVn Eia4 trong n*Yng *oUn cn* tSong ta cng s
*in2 n*S t*].
F. Q*i xRc c\n* z m`t bVn *o{c m`t ngSki ci lz trx ci z c\n* *o{c cRc *in2 n*S
t*] nUo4 cln p*i txn* c]n mji tqn* ti]t liVn M2an4 En c cRc c2`c cUm p*Rn4 mji
t*ac t] mU cRc bVn cy ci trong mbi M2an *v tSong *[ cWa *j cRc t_p M2Rn vU
mji *Un* vi sa2 ci cWa cRc bVn.
Ar!"#e 9
1. T*e parties are bo2nd b an 2sage to w*ic* t*e *ave agreed and b an
practices w*ic* t*e *ave establis*ed between t*emselves
2. T*e parties are considered4 2nless ot*erwise agreed4 to *ave impliedl made
applicable to t*eir contract or its 0ormation a 2sage o0 w*ic* t*e parties Enew or
o2g*t to *ave Enown and w*ic* in international trade is widel Enown to4 and
reg2larl observed b4 parties to contracts o0 t*e tpe involved in t*e partic2lar
trade concerned.
A!SN 9.
1. 8Rc bVn b\ rUng b2`c bpi t_p M2Rn mU *j cy t*a t*2_n vU bpi t*ac tin cy
cSdc t*i]t l_p trong mbi M2an *v tSong *[ ci.
2. Tr| p*i ci t*a t*2_n E*Rc4 ci t*n c*o rng cRc bVn Ez E]t *dp cgng ci ngZ z
Rp dZng n*Yng t_p M2Rn mU *j cy bi]t *o{c cln p*i bi]t vU ci lU n*Yng t_p
M2Rn ci txn* c*ht p*[ bi]n trong t*Song mfi M2bc t] vU cSdc cRc bVn Rp dZng
t*Skng x2Vn cbi vTi *dp cgng csng c*Wng lofi trong l}n* vac b2Xn bRn *Y2
M2an cn ci^2 c*n* *dp cgng cWa mqn* *o{c ci^2 c*n* vivc Ez E]t *dp cgng ci.
Ar!"#e 1.. ,or t*e p2rposes o0 t*is 8onvention<
!a$ I0 a part *as more t*an one place o0 b2siness4 t*e place o0 b2siness is t*at
w*ic* *as t*e closest relations*ip to t*e contract and its per0ormance4
*aving regard to t*e circ2mstances Enown to or contemplated b t*e parties
at an time be0ore or at t*e concl2sion o0 t*e contractL
!b$ I0 a part does not *ave a place o0 b2siness4 re0erence is to be made to *is
*abit2al residence.
A!SN 1.. VTi mZc cxc* cWa 8Xng STc nU4
1. -]2 m`t bVn ci n*i^2 *on m`t trZ sp t*Song mfi t*q trZ sp t*Song mfi cWa
*j s lU trZ sp nUo ci mbi liVn *v c*{t c* n*ht vTi *dp cgng vU vTi vivc t*ac
*ivn *dp cgng ci4 ci txn* tTi n*Yng tqn* *2bng mU cRc bVn c^2 bi]t *o{c c^2
da coRn cSdc p bht E ltc nUo trSTc *o{c vUo t*ki cinm t*ki cinm *dp cgng.
b. -]2 m`t bVn E*Xng ci trZ sp t*Song mfi t*q s lh noi cS trt t*Skng x2Vn
cWa *j.
Ar!"#e 11. / contract o0 sale need not be concl2ded in or evidenced b writing
and is not s2bGect to an ot*er reM2irements as to 0orm. It ma be proved b
an means4 incl2ding witnesses.
A!SN 11. 6dp cgng m2a bRn E*Xng cln p*i cSdc Ez *o{c xRc n*_n bng vn
bn *a p*i t2~n t*eo m`t V2 cl2 nUo E*Rc v^ *qn* t*mc cWa *dp cgng. 6dp
cgng ci t*n cSdc c*'1ng min* bng mji cRc*4 En c bng lki E*ai cWa n*~n
c*mng.
Ar!"#e 1%. /n provision o0 /rticle 114 /rticle 23 or Part II o0 t*is 8onvension
t*at allows a contract o0 sale or its modiKcation or termination b agreement or
an oNer4 acceptance or ot*er indication o0 intension to be made in an 0orm
ot*er t*an in writing does not appl w*ere an part *as *is place o0 b2siness in
a 8ontracting State w*ic* *as made a declaration 2nder /rticle 3( o0 t*is
8onvention. T*e parties ma not derogate 0rom or var t*e eNect o0 t*is /rticle.
A!SN 1%. 7ht E M2 c\n* nUo cWa ei^2 114 ei^2 23 *o{c P*ln t*m *ai cWa 8Xng
STc nU c*o p*p *dp cgng m2a bRn t*a c[i *o{c cqn* c* *dp cgng t*eo sa
t*a t*2_n cWa *dp cgng cRc bVn *o{c con c*Uo *Ung vU c*hp n*_n con c*Uo
*Ung *a bht E sa t*n *ivn 1 c*x cWa bVn cSdc l_p E*Xng p*i dSTi *qn* t*mc
vn bn mU dSTi bht E *qn* t*mc nUo E*Rc s E*Xng cSdc Rp dZng c*o ds c*
m`t trong sb cRc bVn ci trZ sp t*Song mfi c{t p nSTc t*Un* viVn cWa 8Xng STc
mU nSTc ci cy t2Vn bb bo lS2 t*eo ei^2 3( cWa 8Xng STc nU. 8Rc bVn E*Xng
cSdc M2^n lUm trRi vTi ci^2 nU *o{c sa c[i *iv2 lac cWa ni.
Ar!"#e 1'. ,or t*e p2rposes o0 t*is 8onvention4 .writing. incl2des telegram and
telex.
A!SN 1'. T*eo tin* t*ln cWa 8Xng STc nU4 civn bRo vU telex cng cSdc coi lU
*qn* t*mc vn bn.
@ART II. FORMATION OF T1E CONTRACT
Ar!"#e 10.
1. / proposal 0or concl2ding a contract addressed to one or more speciKc
persons constit2tes an oNer i0 it is s2@cientl deKnite and indicates t*e
intention o0 t*e oNer or to be bo2nd in case o0 acceptance. / proposal is
s2@cientl deKnite i0 it indicates t*e goods and expressl or implicitl Kxes or
maEes provision 0or determining t*e M2antit and t*e price.
2. / proposal ot*er t*an one addressed to one or more speciKc persons is to be
considered merel as an invitation to maEe ot*ers4 2nless t*e contrar is clearl
indicated b t*e person maEing t*e proposal.
@1TN II. KU KVT 1?@ ABNG
A!SN 10
1. 9`t c^ ng*\ Ez E]t *dp cgng gi c*o m`t *a n*i^2 ngSki xRc c\n* cSdc coi lU
m`t lki c*Uo *Ung n]2 cSdc xRc c\n* c*xn* xRc vU n]2 ni c* r z c\n* cWa
ngSki c*Uo *Ung m2bn ta rUng b2`c mqn* trong trSkng *dp ci sa c*hp n*_n
c*Uo *Ung. 9`t c^ ng*\ ci cW ci^2 Eivn cSdc coi lU c*xn* xRc E*i ni nV2 r *Ung
*ia vU hn c\n* sb lSdng vU giR c m`t cRc* trac ti]p *o{c giRn ti]p *o{c M2
c\n* t*n t*mc xRc c\n* n*Yng ]2 tb nU.
2. 9`t lki c^ ng*\ c*o m`t *a n*i^2 ngSki xRc c\n* c* cSdc coi lU m`t lki mki
giao d\c* m2a bRn4 tr| p*i ngSki ci nii r z c\n* cWa mqn* trong lki c^ ng*\.
Ar!"#e 1*.
1. /n oNer becomes eNective w*en it reac*es t*e oNeree.
2. /n oNer4 even i0 it is irrevocable4 ma be wit*drawn i0 t*e wit*drawal reac*es
t*e oNeree be0ore or at t*e same time as t*e oNer.
A!SN 1*
1. 9`t t*S c*Uo *Ung ci *iv2 lac E*i ni tTi ta ngSki cSdc c*Uo *Ung.
2. T*S c*Uo *Ung ds lU lofi c*Uo *Ung E*Xng *W ngang vn ci t*n b\ *W b
n]2 t*Xng bRo v^ vivc *W c*Uo *Ung c]n vTi ngSki cSdc c*Uo trSTc *o{c csng
m`t ltc vTi c*Uo *Ung
Ar!"#e 1+
1. >ntil a contract is concl2ded an oNer ma be revoEed i0 t*e revocation
reac*es t*e oNeree be0ore *e *as dispatc*ed an acceptance.
2. 6owever4 an oNer cannot be revoEed<
!a$ I0 it indicates4 w*et*er b stating a Kxed time 0or acceptance or ot*erwise4
t*at it is irrevocableL or
!b$ I0 it was reasonable 0or t*e oNeree to rel on t*e oNer as being irrevocable
and t*e oNeree *as acted in reliance on t*e oNer.
A!SN 1+
1. 8*o tTi E*i *dp cgng cSdc giao E]t4 ngSki c*Uo *Ung vn ci t*n rtt lfi c*Uo
*Ung4 n]2 t*Xng bRo v^ v^ vivc rtt lfi ci tTi noi ngSki cSdc c*Uo *Ung trSTc E*i
ngSki nU gi t*Xng bRo c*hp n*_n c*Uo *Ung
2. T2 n*iVn c*Uo *Ung E*Xng t*n b\ *W b.
a$ -]2 ni c* r4 bng cRc* hn c\n* m`t t*ki *fn cn c*hp n*_n4 *a bng cRc*
nUo E*Rc rng ni E*Xng t*n *W ngang.
b$ -]2 ngSki n*_n coi c*Uo *Ung E*Xng t*n *W ngang lU *dp lz vU cy tin tSpng
*Un* c`ng t*eo t*S c*Uo ci.
Ar!"#e 1, /n oNer4 even i0 it is irrevocable4 is terminated w*en a reGection
reac*es t*e oNeror.
A!SN 1,. 8*Uo *Ung4 ds lU lofi E*Xng *W ngang s mht *iv2 lac E*i ngSki c*Uo
*Ung n*_n cSdc t*Xng bRo v^ vivc t| c*bi c*Uo *Ung.
Ar!"#e 1-
1. / statement made b or ot*er cond2ct o0 t*e oNeree indicating assent to an
oNer is an acceptance. Silence or inactivit does not in itsel0 amo2nt to
acceptance.
2. /n acceptance o0 an oNer becomes eNective at t*e moment t*e indication o0
assent reac*es t*e oNeror. /n acceptance is not eNective i0 t*e indication o0
assent does not reac* t*e oNeror wit*in t*e time *e *as Kxed or4 i0 no time is
Kxed4 wit*in a reasonable time4 d2e acco2nt being taEen o0 t*e circ2mstances o0
t*e transaction4 incl2ding t*e rapidit o0 t*e means o0 comm2nication emploed
b t*e oNeror. /n oral oNer m2st be accepted immediatel 2nless t*e
circ2mstances indicate ot*erwise.
F. 6owever4 i04 b virt2e o0 t*e oNer or as a res2lt o0 practices w*ic* t*e parties
*ave establis*ed between t*emselves or o0 2sage4 t*e oNeree ma indicate
assent b per0orming an act4 s2c* as one relating to t*e dispatc* o0 t*e goods
or pament o0 t*e price4 wit*o2t notice to t*e o00eror4 t*ee acceptance is
eNective at t*e moment t*e act is per0ormed4 provided t*at t*e act is per0ormed
wit*in t*e period o0 t*e time laid down in t*e preceding paragrap*.
A!SN 1-.
1.9`t lki t2Vn bb *a m`t *Un* vi E*Rc cWa ngSki cSdc c*Uo *Ung bin2 *ivn sa
cgng z vTi c*Uo *Ung tfo t*Un* c*hp n*_n c*Uo *Ung. Sa im l{ng *o{c E*Xng
ci *Un* c`ng nUo E*Xng cSdc *in2 lU m{c n*iVn ci giR tr\ n*S m`t sa c*hp
n*_n.
2.8*hp n*_n c*Uo *Ung ci *iv2 lac t| E*i ngSki c*Uo *Ung n*_n cSdc c*hp
n*_n. 8*hp t*2_n c*Uo *Ung E*Xng ci *iv2 lac n]2 n*S t*S c*hp n*_n h E*Xng
cSdc gi tTi ngSki c*Uo *Ung ctng t*ki *fn M2 c\n* trong t*S c*Uo *Ung4 *o{c
n]2 t*ki *fn E*Xng cSdc M2 c\n* t*q trong m`t t*ki gian *dp lz4 xt t*eo cRc
tqn* ti]t cWa giao d\c* En c tbc c` cWa cRc p*Song tivn liVn lfc mU ngSki c*Uo
*Ung s dZng. 9`t c*Uo *Ung bng mivng p*i cSdc c*hp n*_n nga4 tr| E*i
cRc tqn* t*] bwt b2`c p*i ngSdc lfi
F.T2 n*iVn n]2 do *iv2 lac cWa c*Uo *Ung *o{c do t*ac tin cy ci giYa *ai bVn
trong mbi M2an *v tSong *[ *o{c t_p M2Rn t*q ngSki cSdc c*Uo *Ung ci t*n
c*mng t sa c*hp t*2_n cWa mqn* bng m`t *Un* c`ng nUo ci n*S *Un* c`ng
liVn M2an c]n vivc gi *Ung *a tr ti^n ds E*Xng t*Xng bRo c*o ngSki c*Uo
*Ung t*q c*hp n*_n c*Uo *Ung ci *iv2 lac En t| E*i n*Yng vivc lUm ci cSdc t*ac
*ivn vTi ci^2 Eivn lU c*tng p*i cSdc t*ac *ivn vTi ci^2 Eivn lU c*tng p*i cSdc
t*ac *ivn trong t*ki *fn cy M2 c\n* nii p p*ln trVn.
Ar!"#e 19
1. / repl to an oNer w*ic* p2rports to be an acceptance b2t contains additions4
limitations4 or ot*er modiKcations is a reGection o0 t*e ot*er and constit2tes a
co2nter&oNer.
2. 6owever4 a repl to an oNer w*ic* p2rports to be an acceptance b2t contains
additional or diNerent terms w*ic* do not materiall alter t*e terms o0 t*e oNer
constit2tes an acceptance4 2nless t*e oNerer4 wit*o2t 2nd2e dela4 obGects
orall to t*e discrepanc or dispatc*es a notice to t*at eNect. I0 *e does not so
obGect4 t*e terms o0 t*e contract are t*e terms o0 t*e oNer wit* t*e
modiKcations contained in t*e acceptance
F. /dditional or diNerent terms relating4 among ot*er t*ings4 to t*e price4
pament4 M2alit and M2antit o0 t*e goods4 place and time o0 deliver4 extent
o0 one part)s liabilit to t*e ot*er or t*e settlement o0 disp2tes are considered
to alter t*e terms o0 t*e oNer materiall.
A!SN 19.
1. 9`t p*tc cRp ci E*2n* *STng c*hp n*_n c*Uo *Ung n*Sng ci c*ma cang
n*Yng cinm b[ s2ng4 gim bTt *a sYa c[i E*Rc t*q cSdc coi lU t| c*bi c*Uo
*Ung vU tfo nVn sa m{c c v^ m2a bRn.
%. T2 n*iVn sa p*tc cRp t*eo *STng c*hp n*_n c*Uo *Ung4 n*Sng ci c*ma
cang cRc ci^2 E*on b[ s2ng *a n*Yng ci^2 E*on E*Rc mU E*Xng lUm bi]n
c[i m`t cRc* co bn n`i d2ng cWa c*Uo *Ung t*q cSdc coi lU c*hp n*_n c*Uo
*Ung4 tr| p*i ngSki c*Uo *Ung E*Xng bin2 *ivn bng mivng nga cn p*n cbi
n*Yng cinm E*Rc bivt ci *o{c gi nga t*Xng bRo v^ sa p*n cbi cWa mqn* c*o
ngSki cSdc c*Uo *Ung. -]2 ngSki c*Uo *Ung E*Xng lUm n*S v_4 t*q n`i d2ng
cWa *dp cgng s lU n`i d2ng cWa c*Uo *Ung ggm n*Yng sYa c[i nV2 trong c*hp
n*_n c*Uo *Ung.
'. 8Rc ]2 tb b[ s2ng *a sa c[i liVn M2an c]n cRc ci^2 Eivn giR c4 t*an*
toRnL c]n p*um c*ht vU sb lSdng *Ung *ia4 c\a cinm vU t*ki gian giao *Ung4 c]n
p*fm vi trRc* n*ivm cWa cRc bVn *a gii M2]t cRc tran* c*hp cSdc coi lU
n*Yng ci^2 Eivn lUm bi]n c[i m`t cRc* co bn n`i d2ng cWa c*Uo *Ung.
Ar!"#e %.
1. / period o0 t*e time 0or acceptance Kxed b t*e oNeror in a telegram or a
letter begins to r2n 0rom t*e moment t*e telegram is *anded in 0or dispatc*4 or
0rom t*e date s*own on t*e letter or4 i0 no s2c* date is s*own4 0rom t*e date
s*own on t*e envelope. / period o0 time 0or acceptance&Kxed b t*e oNeror b
telep*one4 telex or ot*er means o0 instantaneo2s comm2nication4 begins to r2n
0rom t*e moment t*at
t*e ot*er reac*es t*e oNeree.
2. =@cial *olidas or non&b2siness das occ2rring d2ring t*e period 0or
acceptance are incl2ded in calc2lating t*e period. 6owever4 i0 a notice o0
acceptance cannot be delivered at t*e address o0 t*e oNeror on t*e last da o0
t*e period beca2se t*at da 0alls on an o@cial *olida or a non&b2siness da at
t*e place o0 b2siness o0 t*e oNeror4 t*e period is extended 2ntil t*e Krst
b2siness da w*ic* 0ollows.
A!SN %..
1. T*ki *fn c*hp n*_n c*Uo *Ung do ngSki c*Uo *Ung M2 c\n* trong civn txn
*a t*S4 bwt cl2 t| ltc bmc civn cSdc giao cn gi ci *o{c vUo ngU g*i trVn t*S
*o{c n]2 ngU ci E*Xng ci t*q txn* t| ngU bS2 civn trVn bq t*S. T*ki *fn cn
c*hp n*_n c*Uo *Ung do ngSki c*Uo *Ung M2 c\n* bng civn t*ofi4 bng telex4
*o{c bng p*Song tivn t*Xng tin liVn lfc E*Rc4 bwt cl2 txn* t| t*ki cinm c*Uo
*Ung c]n ta ngSki cSdc c*Uo *Ung.
2. 8Rc ngU l c*xn* t*mc *a ngU ng* nm trong t*ki *fn M2 c\n* c*hp n*_n
c*Uo *Ung t*q E*Xng cSdc tr|4 E*i txn* t*ki *fn ci. T2 n*iVn4 n]2 t*Xng bRo
c*hp n*_n c*Uo *Ung E*Xng t*n giao tfi c\a c* cWa ngSki c*Uo *Ung vUo ngU
c2bi csng cWa t*ki *fn M2 c\n* mU ngU c2bi csng ci lU ngU ln *a ngU ng*
tfi trZ sp t*Song mfi cWa ngSki c*Uo *Ung4 t*q t*ki *fn c*hp n*_n c*Uo *Ung s
cSdc Eo dUi tTi ngU lUm vivc cl2 tiVn ti]p t*eo.
Ar!"#e %1
1. / late acceptance is nevert*eless eNective as an acceptance i0 wit*o2t dela
t*e oNeror orall so in0orms t*e oNeree or dispatc*es a notice to t*at eNect.
2. I0 a letter or ot*er writing containing a late acceptance s*ows t*at it *as been
sent in s2c* circ2mstance t*at i0 its transmission *ad been normal it wo2ld *ave
reac*ed t*e oNeror in d2e time4 t*e late acceptance is eNective as an
acceptance 2nless4 wit*o2t dela4 t*e oNerer orall in0orms t*e oNeree t*at *e
considers *is oNer as *aving lapsed or dispatc*es a notice to t*at eNect.
A!SN %1.
1. 9`t c*hp n*_n c*Uo *Ung c*_m tr vn ci *iv2 lac lU m`t c*hp n*_n n]2
ngSki c*Uo *Ung t*Xng bRo nga bng mivng c*o ngSki n*_n c*Uo *Ung *o{c
gi c*o ngSki nU m`t t*Xng bRo v^ vivc ci.
2. -]2 t*S t| *a vn bn E*Rc lU sa c*hp n*_n c*_m tr4 cSdc ngSki n*_n
c*Uo *Ung gi ci trong n*Yng ci^2 Eivn mU4 n]2 sa c*2nn giao bqn* t*Skng ni
cy c]n ta ngSki c*Uo *Ung E\p t*ki4 tr| p*i ngSki c*Uo *Ung t*Xng bRo nga
bng mivng E*Xng c*_m tr4 *o{c gi vn bn t*Xng bRo nga c*o ngSki cSdc
c*Uo *Ung bi]t rng ngSki c*Uo *Ung coi c*Uo *Ung cWa mqn* cy *]t *iv2 lac.
Ar!"#e %%. /n acceptance ma be wit*drawn i0 t*e wit*drawal reac*es t*e
oNeror be0ore or at t*e same time as t*e acceptance wo2ld *ave become
eNective.
A!SN %%. 8*hp n*_n c*Uo *Ung ci t*n b\ *W b n]2 t*Xng bRo v^ vivc *W b
tTi noi ngSki c*Uo *Ung trSTc *o{c csng t*ki cinm *iv2 lac cWa c*hp n*_n.
Ar!"#e %' / contract is concl2ded at t*e moment w*en an acceptance o0 an
oNer becomes eNective in accordance wit* t*e provisions o0 t*is 8onvension.
A!SN %'. *dp cgng cSdc coi lU cy cSdc Ez En t| ltc c*hp n*_n c*Uo *Ung ci
*iv2 lZc t*eo ctng cRc M2 c\n* cWa 8Xng STc nU.
Ar!"#e %0. ,or t*e p2rposes o0 t*is Part o0 t*e 8onvension4 an oNer4 declaration
o0 acceptance or an ot*er indication o0 intension .reac*es. t*e addressee w*en
it is made orall to *im or delivered b an ot*er means to *im personall4 to
*is place o0 b2siness or mailing address4 to *is *abit2al residence.
A!SN %0. T*eo tin* t*ln cWa P*ln III 8Xng STc nU4 m`t c*Uo *Ung4 m`t t*Xng
bRo c*hp n*_n c*Uo *Ung *o{c bht cm m`t t*n *ivn z c\n* nUo cng cSdc coi lU
tTi noi ngSki cSdc c*Uo *Ung E*i cSdc t*Xng tin bng lki nii vTi ngSki nU4
*o{c cSdc giao bng bht cm p*Song tivn nUo c*o c*xn* ngSki cSdc c*Uo *Ung tfi
trZ sp t*Song mfi cWa *j4 tfi c\a c* bS2 c*xn* *o{c n]2 *j E*Xng ci trZ sp
t*Song mfi *a c\a c* bS2 c*xn*4 t*q gi tTi noi t*Skng trt cWa *j.
@ART III. SA2E OF GOO$S
C5a7er I. GENERA2 @ROVISION
@1TN ': MUA BCN 1DNG 1EA
C5WXn3 1: N5Pn3 YNJ QZn5 "5Nn3
Ar!"#e %* / breac* o0 contract committed b one4 o0 t*e parties is 02ndamental
i0 it res2lts in s2c* detriment to t*e ot*er part as s2bstantiall to deprive *im
o0 w*at *e is entitled to expect 2nder t*e contract4 2nless t*e part in breac*
did not 0oresee and a reasonable person o0 t*e same circ2mstances wo2ld not
*ave 0oreseen s2c* a res2lt.
A!SN %*. Sa vi p*fm *dp cgng do m`t bVn g~ ra lU vi p*fm co bn n]2 vi
p*fm ci lUm c*o bVn Eia b\ t*ivt *fi mU ngSki b\ t*ivt *fi trong m`t c*|ng mac
cRng En b\ mht n*Yng gq mU *j cSdc p*p ci t*eo *dp cgng4 tr| p*i bVn Eia vi
p*fm E*Xng tiVn liv2 cSdc *_2 M2 ci vU m`t ngSki ci lz trx min* mn cng s
E*Xng tiVn liv2 cSdc n]2 p vUo *oUn cn* tSong ta.
Ar!"#e %+ / declaration o0 avoidance o0 t*e contract is eNective onl i0 made
b notice to t*e ot*er part.
A!SN %+. 9`t lki t2Vn bb v^ vivc *W *dp cgng c* ci *iv2 lac n]2 cSdc t*Xng
bRo c*o bVn Eia bi]t.
Ar!"#e %, >nless ot*erwise expressl provided in t*is Part o0 t*e 8onvention i0 an
notice4 reM2est or ot*er comm2nication is given or made b a part in accordance wit*
t*is Part and b means appropriate in t*e circ2mstances4 a dela or error in t*e
transmission o0 t*e comm2nication or its 0ail2re to arrive does not deprive t*at part o0
t*e rig*t to rel on t*e comm2nication
A!SN %,. Tr| p*i P*ln II cWa 8Xng STc nU ci M2i c\n* E*Rc4 n]2 t*Xng bRo V2 cl2
*a t*Xng tin E*Rc cy cSdc t*ac *ivn bpi m`t bVn cWa *dp cgng t*eo P*ln III nU vU
bng m`t p*Song tivn t*xc* *dp vTi *oUn cn*4 t*q sa c*_m tr *o{c llm ln trong vivc
c*2nn giao t*Xng tin *o{c t*Xng tin E*Xng c]n ngSki n*_n4 cng s E*Xng lUm bVn ci
mht M2^n vivn dn cRc t*Xng tin cWa mqn*.
Ar!"#e %- I04 in accordance wit* t*e provisions o0 t*is 8onvention4 one part is
entitled to reM2ire per0ormance o0 an obligation b t*e ot*er part4 a co2rt is
not bo2nd to enter a G2dgement 0or speciKc per0ormance 2nless t*e co2rt wo2ld
do so 2nder its own law in respect o0 similar contracts o0 sale not governed b
t*is 8onvention.
A!SN %-. -]2 m`t bVn ci M2^n V2 cl2 bVn Eia t*ac *ivn ng*}a vZ nUo ci t*q
c*i]2 t*eo cRc M2 c\n* cWa 8Xng STc nU4 ta Rn E*Xng b\ bwt b2`c p*i ra
p*Rn M2]t b2`c bVn Eia t*ac *ivn *dp cgng4 tr| E*i ta Rn ra p*Rn M2]t ci
trVn co sp l2_t nSTc mqn* cbi vTi cRc *dp cgng m2a bRn tSong ta E*Xng cSdc
M2Rn trivt bpi 8Xng STc nU.
Ar!"#e %9
1. / contract ma be modiKed or terminated b t*e mere agreement o0 t*e
parties.
2. / contract in writing w*ic* contains a provision reM2iring an modiKcation or
termination b agreement to be in writing ma not be ot*erwise modiKed or
terminated b agreement. 6owever4 a part ma be precl2ded b *is cond2ct
0rom asserting s2c* a provision to t*e extent t*at t*e ot*er part *as relied on
t*at contract.
A!SN %9.
1. 9`t *dp cgng ci t*n cSdc ci^2 c*n* *a c*hm dmt bng t*a t*2_n con
t*2ln
%. 9`t *dp cgng bng vn bn c*ma cang m`t ci^2 E*on M2i c\n* rng mji sa
sYa c[i *o{c c*hm dmt *dp cgng p*i cSdc cRc bVn lUm bng vn bn t*q E*Xng
t*n b\ sYa c[i *a c*hm dmt t*eo t*a t*2_n giYa cRc bVn dSTi m`t *qn* t*mc
E*Rc. T2 n*iVn *Un* c`ng cWa m`t bVn ci t*n E*Xng c*o p*p *j vivn dn ci^2
E*on h trong c*|ng mac mU bVn Eia cn cm vUo *Un* c`ng ci.
C5a7er II. OB2IGATIONS OF T1E SE22ER
C5WXn3 II. N3[a 8\ "]a n3W^! /_n
Ar!"#e '.. T*e seller m2st deliver t*e goods4 *and over an doc2ments
relating to t*em and trans0er t*e propert in goods4 as reM2ired b t*e contract
and t*is 8onvention.
A!SN '.. -gSki bRn ci ng*}a vZ giao *Ung4 giao c*mng t| liVn M2an c]n *Ung
*ia vU c*2nn giao M2^n sp *Y2 v^ *Ung *ia ctng t*eo M2 c\n* cWa *dp
cgng vU cWa 8Xng STc nU.
Se"!on I. $e#!8erJ o6 5e 3oods and 5and!n3 o8er o6 do"N4ens
M\" I. G!ao 5`n3 8` "5NJRn 3!ao "5an3 b
Ar!"#e '1. I0 t*e seller is not bo2nd to deliver t*e goods at an ot*er partic2lar
place4 *is obligation to deliver consists<
!a$ I0 t*e contract o0 sale involves carriage o0 t*e goods in *anding t*e goods
over to t*e Krst carrier 0or transmission to t*e b2erL
!b$ I04 in cases not wit*in t*e preceding s2bparagrap*4 t*e contract relates to
speciKc goods4 or 2nidentiKed goods to be drawn 0rom a speciKc stocE or to be
man20act2red or prod2ced4 and at t*at time o0 t*e concl2sion o0 t*e contract
t*e parties Enew t*at t*e goods were at4 or were to be man20act2red or
prod2ced at4 a partic2lar place & in placing t*e goods at t*e b2er)s disposal at
t*at place.
!c$ In ot*er cases in placing t*e goods at t*e b2er)s disposal at t*e place w*ere
t*e seller *ad *is place o0 b2siness at t*e time o0 t*e concl2sion o0 t*e contract.
A!SN '1. -]2 ngSki bRn E*Xng b\ b2`c p*i giao *Ung tfi m`t noi n*ht c\n* nUo
ci4 t*q ng*}a vZ giao *Ung cWa ngSki ch ggm
a$ -]2 *dp cgng m2a bRn M2 c\n* c vivc v_n c*2nn *Ung *ia 4 t*q ngSki bRn
p*i giao *Ung c*o ngSki v_n c*2nn cl2 tiVn cn c*2nn giao c*o ngSki m2a.
b$ -]2 trong n*Yng trSkng *dp E*Xng nm trong trSkng *dp c^ c_p tfi cinm nii
trVn4 mU cbi tSdng cWa *dp cgng m2a bRn lU *Ung c{c c\n* *o{c *Ung cgng lofi
p*i cSdc tRc* ra t| m`t E*bi lSdng da trY xRc c\n* *o{c p*i cSdc c*] tfo *a
sn x2ht ra vU vUo ltc Ez E]t *dp cgng4 cRc bVn cy bi]t rng *Ung *ia cy ci
*a cy p*i cSdc c*] tfo *o{c cSdc sn x2ht tfi m`t noi nUo ci4 t*q ngSki bRn
p*i ci ng*}a vZ c{t *Ung dSTi M2^n c\n* coft cWa ngSki m2a tfi noi ci.
c$ Trong trSkng *dp E*Rc4 ngSki bRn ci ng*}a vZ c{t *Ung dSTi M2^n c\n* coft
cWa ngSki m2a tfi noi mU ngSki bRn ci trZ sp t*Song mfi vUo t*ki cinm Ez E]t
*dp cgng.
Ar!"#e '%. I0 t*e seller4 in accordance wit* t*e contract or t*is 8onvention4
*ands t*e goods over to a carrier and i0 t*e goods are not clearl identiKed to
t*e contract b marEings on t*e goods4 b s*ipping doc2ments or ot*erwise4
t*e seller m2st give t*e b2er notice o0 t*e consignment speci0ing t*e goods.
1. I0 t*e seller is bo2nd to arrange 0or carriage o0 t*e goods4 *e m2st maEe s2c*
contracts as are necessar 0or carriage to t*e place Kxed b means o0
transportation appropriate in t*e 2s2al terms 0or s2c* transportation.
2. I0 t*e seller is not bo2nd to eNect ins2rance in respect to t*e carriage o0 t*e
goods4 *e m2st4 at t*e b2er)s reM2est4 provide *im wit* all available
in0ormation necessar to enable *im to eNect s2c* ins2rance.
A!SN '%.
1. -]2 ngSki bRn4 c*i]2 t*eo *dp cgng *a 8Xng STc nU4 giao *Ung c*o m`t
ngSki c*2Vn c*4 vU n]2 *Ung E*Xng cSdc tRc* bivt m`t cRc* r rUng c*o mZc
cxc* cWa *dp cgng bng cRc* g*i Ez my *iv2 trVn *Ung *ia4 bng cRc c*mng t|
c*2Vn c* *a bng cRc* nUo E*Rc4 t*q ngSki bRn p*i t*Xng bRo c*o ngSki
m2a bi]t v^ vivc *j cy gi *Ung Em t*eo c* dn v^ *Ung *ia.
2. -]2 ngSki bRn ci ng*}a vZ t*2 x]p vivc c*2Vn c* *Ung *ia4 t*q *j p*i Ez
E]t cRc *dp cgng cln t*i]t cn vivc c*2Vn c* cSdc t*ac *ivn tTi cxc*4 bng cRc
p*Song tivn c*2Vn c* t*xc* *dp vTi *oUn cn* cZ t*n vU t*eo cRc ci^2 Eivn
t*Xng t*Skng cbi vTi p*Song t*mc c*2Vn c* ci.
F. -]2 ngSki bRn E*Xng ci ng*}a vZ bo *inm *Ung *ia trong M2R trqn* c*2Vn
c*4 t*q *j p*i c2ng chp c*o ngSki m2a4 n]2 ngSki m2a V2 cl24 mji t*Xng tin
cln t*i]t ci t*n gitp ngSki m2a Ez E]t *dp cgng bo *inm.
Ar!"#e ''. T*e seller m2st deliver t*e goods<
!a$ I0 t*e date is Kxed b or determinable 0rom t*e contract4 on t*at dateL
!b$ I0 a period o0 time is Kxed b or determinable 0rom t*e contract4 at an time
wit*in t*at period 2nless circ2mstances indicate t*at t*e b2er is to c*oose a
dateL or
!c$ In an ot*er case4 wit*in a reasonable time a0ter t*e concl2sion o0 t*e
contract.
A!SN ''. -]2 ngSki bRn p*i giao *Ung
a$ etng vUo ngU giao *Ung mU *dp cgng cy M2 c\n*4 *a ci t*n xRc c\n*
ngU ci bng cRc* t*am c*i]2 *dp cgng4
b$ VUo bht E t*ki cinm nUo trong E*ong t*ki gian cSdc *dp cgng hn c\n* *a
ci t*n xRc c\n* cSdc bng cRc* t*am c*i]2 *dp cgng n]2 n*S E*Xng t*n cn cm
vUo cRc tqn* ti]t cn bi]t ngU giao *Ung mU ngSki m2a hn c\n*.
c$ Trong mji trSkng *dp E*Rc4 trong m`t t*ki *fn *dp lz sa2 E*i *dp cgng cSdc
Ez E]t.
Ar!"#e '0
I0 t*e seller is5bo2nd to *and over doc2ments relating to t*e goods4 *e m2st
*and t*em over at t*e time and place and in t*e 0orm reM2ired b t*e contract.
I0 t*e seller *as *anded over doc2ments be0ore t*at time4 *e ma4 2p to t*at
time4 c2re an lacE o0 con0ormit in t*e doc2ments4 i0 t*e exercise o0 t*is rig*t
does not
ca2se t*e b2er 2nreasonable inconvenience or 2nreasonable expense.
6owever4 t*e b2er retains an rig*t to claim damages as provided 0or in t*is
8onvention.
A!SN '0. -]2 ngSki bRn ci ng*}a vZ giao cRc c*mng t| ci liVn M2an c]n *Ung
*ia t*q *j p*i t*ac *ivn ng*}a vZ nU ctng t*ki *fn4 ctng c\a cinm vU ctng
*qn* t*mc n*S M2 c\n* cWa *dp cgng. Trong trSkng *dp ngSki bRn giao c*mng t|
trSTc t*ki *fn4 t*q ngSki bRn ci t*n4 trSTc E*i *]t t*ki *fn M2 c\n* lofi b
n*Yng cinm E*Xng p*s *dp trong c*mng t| vTi ci^2 Eivn lU vivc lUm nU E*Xng
g~ c*o ngSki m2a m`t trp ngfi *a p*x t[n vX lz nUo. T2 n*iVn ngSki m2a vn
ci M2^n ci ngSki bRn bgi t*Skng t*ivt *fi c*i]2 t*eo cXng STc nU.
Se"!on II. Con6or4!J o6 5e 3oods and 5!rd 7arJ "#a!4s
Ar!"#e '*
1. T*e seller m2st deliver goods w*ic* are o0 t*e M2antit4 M2alit and
description reM2ired b t*e contract and w*ic* are contained or pacEaged in
t*e manner reM2ired b t*e contract.
2. Except w*ere t*e parties *ave argeed ot*erwise4 t*e goods do not con0orm
wit* t*e contract 2nless t*e
!a$ /re Kt 0or t*e p2rposes 0or w*ic* goods o0 t* same description wo2ld
ordinaril be 2sedL
!b$ /re Kt 0or an partic2lar p2rpose expressl or impliedl made Enown to t*e
seller at t*e time o0 t*e concl2sion o0 t*e contract4 except w*ere t*e
circ2mstances s*ow t*at t*e b2er did not rel4 or t*at it was 2nreasonable
0or *im to rel4 on t*e seller)s sEill and G2dgementL
!c$ Possess t*e M2alities o0 goods w*ic* t*e seller *as *eld o2t to t*e b2er as a
sample or modelL
!d$ /re contained or pacEaged in t*e manner 2s2al 0or s2c* goods or4 w*ere
t*ere is no s2c* manner4 in a manner adeM2ate to preserve and protect t*e
goods.
F. T*e seller is not liable 2nder s2bparagrap*s !a$ to !d$ o0 t*e preceding
paragrap* 0or an lacE o0 con0ormit o0 t*e goods i0 at t*e time o0 t*e
concl2sion o0 t*e contract t*e b2er Enew or co2ld not *ave been 2naware
o0 s2c* lacE o0 con0ormit.
McC II. Tdn5 75e 5f7 "]a 5`n3 5ga 8` YNJSn "]a n3W^! 5a '.
A!SN '*.
1. -gSki bRn p*i giao *Ung ctng sb lSdng4 p*um c*ht vU mX t M2 c\n* trong
*dp cgng4 vU ctng bao bq *a cing gii n*S trong *dp cgng V2 cl2.cRc bVn
t*a t*2_n E*Rc4 *Ung
2. -gofi tr| trSkng *dp cRc bVn cy ci t*a t*2_n E*Rc4 *Ung *ia b\ coi lU
E*Xng p*s *dp vTi *dp cgng n]2
a$ 8*tng E*Xng t*xc* *dp c*o cRc mZc cxc* s dZng mU *Ung *ia csng lofi
vn t*Skng Rp dZngL
b$ 6Ung E*Xng t*xc* *dp c*o cRc mZc cxc* cZ t*n nUo mU ngSki bRn cy trac
ti]p *o{c giRn ti]p bi]t cSdc vUo ltc Ez E]t *dp cgng4 tr| trSkng *dp cRc
*oUn cn* cZ t*n c*o t*h rng ngSki m2a cy E*Xng daa vUo E nng vU
M2]t c\n* cWa ngSki bRn4 *o{c vivc daa vUo n*S v_ lU E*Xng *dp lzL
c$ 6Ung *ia E*Xng t*n *ivn cRc p*um c*ht cWa *Ung mu2 *o{c Ein2 dRng mU
ngSki bRn cy c2ng chp c*o ngSki m2aL
d$ 6Ung E*Xng cSdc cing bao bq t*eo cRc* t*Xng t*Skng c*o n*Yng *Ung csng
lofi *o{c4 n]2 E*Xng t*n *ivn cRc* t*Xng t*Skng4 t*q bng cRc* t*xc* *dp cn
giY gqn vU bo vv *Ung *ia ci.
F. -gSki bRn E*Xng c*\2 trRc* n*ivm v^ vivc giao *Ung E*Xng ctng *dp cgng
n*S cy nV2 trong cRc cinm t| !a$ c]n !d$ cWa ei^2 E*on trVn n]2 ngSki m2a
cy bi]t *o{c E*Xng t*n E*Xng bi]t v^ vivc *Ung E*Xng p*s *dp vUo ltc Ez
E]t *dp cgng.
Ar!"#e '+
1. T*e seller is liable accordance wit* t*e contract and t*is 8onvension 0or an
lacE o0 con0ormit w*ic* exists at t*e time w*en t*e risE passes to t*e
b2erL even t*o2g* t*e lacE o0 con0ormit becomes apparent onl a0ter t*at
time.
2. T*e seller is also liable 0or an lacE o0 con0ormit w*ic* occ2rs a0ter t*e time
indicated in t*e preceding paragrap* and w*ic* is d2e to a breac* o0 an o0
*is obligations4 incl2ding a breac* o0 an g2arantee t*at 0or a period o0 time
t*e goods will remain Kt 0or t*eir ordinar p2rpose or 0or some partic2lar
p2rpose or will retain speciKed M2alities or c*aracteristics.
A!SN '+.
1. -gSki bRn c*\2 trRc* n*ivm4 t*eo ctng *dp cgng vU 8Xng STc nU4 v^ mji
sa E*Xng p*s *dp cWa *Ung *ia vUo ltc c*2nn giao rWi ro c*o ngSki m2a4
nga c E*i sa E*Xng p*s *dp cWa *Ung *ia c* cSdc p*Rt *ivn sa2 ci.
2. -gSki bRn cng c*\2 trRc* n*ivm v^ mji sa E*Xng p*s *dp cWa *Ung *ia
x ra sa2 t*ki cinm cy nii p cinm trVn vU lU *_2 M2 cWa sa vi p*fm bht
E ng*}a vZ nUo cWa ngSki bRn4 En c vivc E*Xng t*n cm bo trong m`t
t*ki *fn nUo ci4 *Ung *ia vn t*xc* *dp c*o mZc cxc* s dZng t*Xng
t*Skng *a mZc cxc* cZ t*n *o{c vn d2 trq cSdc n*Yng txn* c*ht *a
c{c cinm cy M2 c\n*.

Ar!"#e ',. I0 t*e seller *as delivered goods be0ore t*e date 0or deliver4 *e
ma4 2p to t*at date4 deliver an missing part or maEe 2p an deKcienc in t*e
M2antit o0 t*e goods delivered4 or deliver goods in replacement o0 an non&
con0orming goods delivered or remed an laEe o0 con0ormit in t*e goods
delivered4 provided t*at t*e exercise o0 t*is rig*t does not ca2se t*e b2er
2nreasonable inconvenience or
2nreasonable expense. 6owever4 t*e b2er retains an rig*t to claim damages
as provided 0or in t*is 8onvention.
A!SN ',. Trong trSkng *dp giao *Ung trSTc t*ki *fn4 ngSki bRn ci M2^n4 c*o
tTi t*ki *fn ci4 giao m`t p*ln *a m`t sb lSdng t*i]2 *o{c giao *Ung mTi t*a
c*o *Ung cy giao t*Xng p*s *dp vTi *dp cgng4 *o{c E*wc p*Zc mji sa E*Xng
p*s *dp cWa *Ung *ia cy giao vTi ci^2 Eivn vivc lUm ci cWa ngSki bRn E*Xng
g~ c*o ngSki m2a m`t trp ngfi *a p*x t[n vX lz nUo. T2 n*iVn ngSki m2a ci
M2^n ci bgi t*Skng t*ivt *fi c*i]2 t*eo 8Xng STc nU.
Ar!"#e '-
1. T*e b2er m2st examine t*e goods4 or ca2se t*em to be examined4 wit*in as
s*ort a period as is practicable in t*e circ2mstances.
2. i0 t*e contract involves carriage o0 t*e goods4 examination ma be de0erred
2ntill a0ter t*e goods *ave arrived at t*eir destination.
F. i0 t*e goods are redirected in transit or redispatc*ed b t*e b2er wit*o2t a
reasonable opport2nit 0or examination b *im and at t*e time o0 t*e
concl2sion o0 t*e contract t*e seller Enew or o2g*t to *ave Enown o0 t*e
possibilit o0 s2c* redirection or redispatc*4 examination ma be de0erred
2ntil a0ter t*e goods *ave arrived at t*e new destination.
A!SN '-.
1. -gSki m2a p*i Einm tra *Ung *o{c bo cm cy ci sa Einm tra *Ung
trong m`t t*ki gian ngwn mU t*ac t] ci t*n lUm cSdc ts tqn* *2bng cZ
t*n.
2. -]2 *dp cgng ci M2 c\n* v^ c*2Vn c* *Ung *ia4 t*q vivc Einm tra
*Ung ci t*n cSdc c*_m lfi c]n ltc *Ung tTi noi p*i c]n.
F. -]2 c\a cinm c]n cWa *Ung b\ t*a c[i trong t*ki gian *Ung cang trVn
cSkng v_n c*2nn *o{c *Ung cSdc ngSki m2a gi ci ti]p vU E*i ci
ngSki m2a Ego(ng ci co *`i *dp lz cn Einm tra *Ung *ia4 cn ngSki
bRn cy bi]t *a cRng l p*i bi]t E*i Ez E]t *dp cgng v^ E* nng c[i
l` trqn* *a gi ti]p ci4 t*q vivc Einm tra ci t*n cSdc dki lfi c*o c]n E*i
*Ung cy tTi noi c]n mTi.
Ar!"#e '9
1. T*e b2er loses t*e rig*t to rel on a lacE o0 con0ormit o0 t*e goods i0 *e
does not give notice to t*e seller speci0ing t*e nat2re o0 t*e lacE o0 con0ormit
wit*in a reasonable time a0ter *e *as discovered it or o2g*t to *ave discovered
it.
2. In an event4 t*e b2er loses t*e rig*t to rel on a lacE o0 con0ormit o0 t*e
goods i0 *e does not give t*e seller notice t*ereo0 at t*e latest wit*in a period o0
two ears 0rom t*e date on w*ic* t*e goods were act2all *anded over to t*e
b2er4 2nless t*is time&limit is inconsistent wit* a contract2al period o0
g2arantee.
A!SN '9.
1. -gSki m2a b\ mht M2^n E*i]2 nfi v^ *Ung *ia E*Xng p*s *dp vTi *dp
cgng n]2 ngSki m2a E*Xng t*Xng bRo c*o ngSki bRn n*Yng tin tmc v^ sa
bht p*s *dp ci trong m`t t*ki *fn *dp lz En t| ltc ngSki m2a cy p*Rt
*ivn *a cRng l cy p*i p*Rt *ivn ra E*i]m E*2]t ci.
2. Trong mji trSkng *dp4 ngSki m2a b\ mht M2^n E*i]2 nfi *Ung E*Xng p*s
*dp vTi *dp cgng n]2 ngSki m2a E*Xng t*Xng bRo c*o ngSki bRn bi]t ci^2
ci c*_m n*ht trong t*ki *fn 2 nm En t| ngU *Ung *ia cy t*ac sa giao
c*o ngSki m2a tr| p*i t*ki *fn nU trRi ngSdc vTi t*ki *fn bo *Un* M2
c\n* trong *dp cgng.
Ar!"#e 0.. T*e seller is not entitled to rel on t*e provisions o0 /rticles F" and
F3 i0 t*e lacE o0 con0ormist relates to 0acts o0 w*ic* *e Enew or co2ld not
*ave been 2naware and w*ic* *e did not disclose to t*e b2er.
A!SN 0.. -gSki bRn E*Xng ci M2^n vivn dn cRc M2 c\n* cWa ei^2 F" vU F3
n]2 sa E*i]m E*2]t cWa *Ung *ia liVn M2an c]n cRc ]2 tb mU ngSki bRn cy
bi]t *o{c E*Xng t*n E*Xng bi]t vU *j cy E*Xng t*Xng bRo c*o ngSki m2a4
Ar!"#e 01. T*e seller m2st deliver goods w*ic* are 0ree 0rom an rig*t or claim
o0 a t*ird part4 2nless t*e b2er agreed to taEe t*e goods s2bGect to t*at rig*t
or claim. 6owever4 i0 s2c* rig*t or claim is based on ind2strial propert or ot*er
intellect2al propert t*e seller)s obligation is governed b /rticle #2.
A!SN 01. -gSki bRn p*i giao lofi *Ung mU c*tng E*Xng b\ rUng b2`c bpi bht cm
M2^n *a E*i]2 nfi nUo cWa ngSki t*m F tr| trSkng *dp ngSki m2a cgng z n*_n
lofi *Ung b\ rUng b2`c vUo M2^n vU E*i]2 nfi ci. T2 n*iVn4 n]2 M2^n vU
E*i]2 nfi ci cSdc *qn* t*Un* trVn co sp sp *Y2 cXng ng*ivp *a sp *Y2 trx t2v
t*q ng*}a vZ cWa ngSki bRn s cSdc ci^2 c*n* t*eo ei^2 #2.
Ar!"#e 0%
1. t*e seller m2st deliver goods w*ic* are 0ree 0rom an rig*t or claim o0 a t*ird
part based on ind2strial propert or ot*er intellect2al propert4 o0 w*ic* at
t*e time o0 t*e concl2sion o0 t*e contract t*e seller Enew or co2ld not *ave
been 2naware4 provided t*at t*e rig*t or claim is based on ind2strial propert
or ot*er intellect2al propert or ot*er intellect2al propert<
!a$ 2nder t*e law o0 t*e State w*ere t*e goods will be resold or ot*erwise 2sed4
it was contemplated b t*e parties at t*e time o0 t*e concl2sion o0 t*e
contract t*at t*e goods wo2ld be resold or ot*erwise 2sed in t*at StateL or
!b$ in an ot*er case4 2nder t*e law o0 t*e State w*ere t*e b2er *as *is place
o0 b2siness.
2. T*e obligation o0 t*e seller 2nder t*e preceding paragrap* does not extend to
t*e cases4 w*ere
!a$ at t*e time o0 t*e concl2sion o0 t*e contract t*e b2er Enew or co2ld not
*ave been 2naware o0 t*e rig*t or claim Lor
!b$ T*e rig*t or claim res2lts 0rom t*e seller)s compliance wit* tec*nical
drawings4 designs4 0orm2lae or ot*er s2c* speciKcations 02rnis*ed b t*e b2er.
A!SN 0%.
1. -gSki bRn p*i giao n*Yng *Ung *ia mU c*tng E*Xng b\ rUng b2`c bpi bht
cm M2^n *a E*i]2 nfi nUo cWa ngSki t*m ba trVn co sp sp *Y2 cXng
ng*ivp *a sp *Y2 trx t2v E*Rc mU ngSki bRn cy bi]t *o{c E*Xng t*n E*Xng
bi]t vUo t*ki cinm Ez E]t *dp cgng4 vTi ci^2 Eivn n]2 cRc M2^n vU V2
sRc* nii trVn cSdc *qn* t*Un* trVn co sp sp *Y2 cXng ng*ivp *a sp *Y2 trx
t2v E*Rc.
a$ t*eo p*Rp l2_t cWa M2bc gia noi *Ung *ia s cSdc bRn *a s dZng
bng cRc* E*Rc4 n]2 cRc bVn da coRn vUo ltc Ez E]t *dp cgng rng
*Ung *ia s cSdc bRn lfi *a s dZng bng cRc* E*Rc tfi M2bc gia
ciL *o{c
b$ trong mji trSkng *dp E*Rc4 t*eo l2_t p*Rp cWa M2bc gia noi ci trZ sp
t*Song mfi cWa ngSki m2a.
2. Trong cRc trSkng *dp sa2 c~4 ngSki bRn E*Xng b\ rUng b2`c bpi n*Yng
ng*}a vZ nV2 trVn
a$ VUo ltc Ez E]t *dp cgng4 ngSki m2a cy bi]t *o{c E*Xng t*n E*Xng
bi]t v^ sa *ivn *Y2 cWa *a E*iV2 nfi nii trVnL *o{c
b$ M2^n *a E*i]2 nfi bwt ng2gn t| vivc ngSki bRn cy t2~n t*eo bn
v E t*2_t t*i]t E] cXng t*mc *a n*Yng sb liv2 c*i ti]t do ngSki
m2a c2ng chp.
Ar!"#e 0'
1. T*e b2er loses t*e rig*t to rel on t*e provision o0 /rticle #1 or article #2 i0
*e does not give notice to t*e seller speci0ing t*e nat2re o0 t*e rig*t or
claim o0 t*e t*ird part wit*in a reasonable time a0ter *e *as become aware
o0 t*e rig*t or claim.
2. T*e seller is not entitled to rel on t*e provision o0 t*e preceding paragrap* i0
*e Enew o0 t*e rig*t or claim o0 t*e t*ird part and t*e nat2re o0 it.
A!SN 0'.
1. -gSki m2a mht M2^n E*i]2 nfi daa vUo cRc M2 c\n* cWa ei^2 #1 vU #24
n]2 ngSki m2a E*Xng t*Xng bRo c*o ngSki bRn txn* c*ht cWa M2^n *a
E*i]2 nfi cWa ngSki tm F4 trong m`t t*ki gian *dp lz En t| E*i ngSki m2a
cy bi]t *a cRng l p*i bi]t v^ M2^n *a E*i]2 nfi ci.
2. -gSki bRn E*Xng ci M2^n vivn dn n*Yng M2 c\n* tfi cinm !1$ nV2 trVn
n]2 ngSki bRn cy bi]t v^ M2^n *a E*i]2 nfi cWa ngSki t*m F v^ txn* c*ht
cWa M2^n *a E*i]2 nfi ci.
Ar!"#e 00. -otwit*standing t*e provisions o0 paragrap* !1$ o0 /rticle F3 and
paragrap* !1$ o0 /rticle #F4 t*e .
b2er ma red2ce t*e price in accordance wit* /rticle %0 or claim damages4
except 0or loss o0 proKt4 i0 *e
*as a reasonable exc2se 0or *is 0ail2re to give t*e reM2ired notice.
ei^2 ##. 7ht En n*Yng M2 c\n* cWa cinm !1$ ei^2 F3 vU cinm !1$ ei^2 #F4 ngSki
m2a ci t*n gim giR t*eo ei^2 %0 *a ci bgi t*Skng t*ivt *fi4 ngofi tr| E*on
ldi b\ b l4 n]2 ngSki m2a ci lz do *dp lz cn gii t*xc* ng2Vn n*~n E*Xng
t*Xng bRo tin tmc cln t*i]t c*o ngSki bRn.
Se"!on III. Re4ed!es 6or /rea"5 o6 "onra" /J 5e se##er
M\" III. C_" /!hn 75_7 /io 5j 75_7 #k ron3 n5Pn3 rW^n3
5f7 n3W^! /_n 8! 75l4 5f7 Qmn3.
Ar!"#e 0*. I0 t*e seller 0ails to per0orm an o0 *is obligations 2nder t*e
contract or t*is 8onvention4 t*e b2er ma
!a$ exercise t*e rig*ts provided in /rticles #( to %2L
!b$ claim damages as provided in /rticles '# to ''.
1. T*e b2er is not deprived o0 an rig*t *e ma *ave to claim damages b
exercising *is rig*t to ot*er remedies.
2. -o period o0 grace ma be granted to t*e seller b a co2rt or arbitral trib2nal
w*en t*e b2er resorts to a remed 0or breac* o0 contract.
A!SN 0*.
1. -]2 ngSki bRn E*Xng t*ac *ivn m`t ng*}a vZ p*Rt sin* t*eo *dp cgng m2a
bRn *a 8Xng STc nU4 t*q ngSki m2a ci cn cm cn
a$ t*ac *ivn n*Yng M2^n *fn cWa mqn* t*eo M2 c\n* tfi cRc ei^2 t| #( c]n
%2L
b$ ci bgi t*Skng t*ivt *fi n*S M2 c\n* tfi cRc ei^2 t| '# c]n ''.
2. -gSki m2a E*Xng mht M2^n ci bgi t*Skng t*ivt *fi E*i *j cy s dZng
M2^n Rp dZng m`t bivn p*Rp bo *` p*Rp lz trong trSkng *dp ngSki bRn vi
p*fm *dp cgng.
Ar!"#e 0+. T*e b2er ma reM2ire per0ormance b t*e seller o0 t*is
obligations 2nless t*e b2er *as resorted to a remed w*ic* is inconsistent
wit* t*is reM2irement.
1. I0 t*e goods do not con0orm wit* t*e contract4 t*e b2er ma reM2ire deliver
o0 s2bstit2te goods onl i0 t*e lacE o0 con0ormit constit2tes a 02ndamental
breac* o0 contract and a reM2est 0or s2bstit2te goods is made eit*er in
conG2nction wit* notice given 2nder /rticle F3 or wit*in a reasonable time
t*erea0ter.
2. I0 t*e goods do not con0orm wit* t*e contract4 t*e b2er ma reM2ire t*e
seller to remed t*e lacE o0 con0ormit b repair4 2nless t*is is 2nreasonable
*aving regard to all t*e circ2mstances. / reM2est 0or repair m2st be made eit*er
in conG2nction wit* notice given 2nder /rticle F3 or wit*in a reasonable time
t*erea0ter.
A!SN 0+.
1. -gSki m2a ci t*n V2 cl2 ngSki bRn t*ac *ivn ng*}a vZ4 tr| p*i ngSki m2a
s dZng m`t bivn p*Rp bo *` p*Rp lz E*Xng p*s *dp vTi V2 cl2 ci.
2. -]2 *Ung *ia E*Xng p*s *dp vTi *dp cgng4 ngSki m2a c* ci t*n ci ngSki
bRn p*i giao *Ung t*a t*] E*i sa E*Xng p*s *dp ci tfo nVn m`t sa vi
p*fm co bn *dp cgng vU V2 cl2 t*a t*] *Ung p*i cSdc c{t ra csng m`t
ltc vTi vivc t*Xng bRo n*Yng dY Eivn t*eo ci^2 F3 *o{c trong m`t t*ki *fn
*dp lz sa2 ci.
F. -]2 *Ung *ia E*Xng p*s *dp vTi *dp cgng4 ngSki m2a ci M2^n V2 cl2
ngSki bRn lofi tr| sa E*i]m E*2]t h4 tr| p*i ci^2 nU E*Xng *dp lz xt
t*eo tht c cRc tqn* ti]t. ?V2 cl2 loft tr| sa E*i]m E*2]t cWa *Ung *ia so
vTi *dp cgng p*i cSdc ti]n *Un*4 *o{c csng m`t ltc vTi t*Xng bRo n*Yng
dY Eivn t*eo ei^2 F3 *o{c trong m`t t*ki *fn *dp lz sa2 ci.
Ar!"#e 0,
1. T*e b2er ma Kx an additional period o0 t*e time o0 reasonable lengt* 0or
per0ormance b t*e seller or *is obligations. .
2. >nless t*e b2er *as received notice 0rom t*e seller t*at *e will not per0orm
wit*in t*e period so Kxed4 t*e b2er ma not4 d2ring t*at period .resort to an
remed 0or breac* o0 contract. 6owever4 t*e b2er is not deprived t*ereb o0
an rig*t *e ma *ave to claim damages 0or dela in per0ormance.
A!SN 0,.
1. -gSki m2a ci t*n hn c\n* t*Vm m`t t*ki *fn *dp lz cn ngSki bRn t*ac *ivn
ng*}a vZ.
2. Tr| p*i ngSki m2a cy cSdc ngSki bRn t*Xng bRo rng ngSki bRn s E*Xng
t*ac *ivn ng*}a vZ cWa mqn* trong t*ki *fn b[ s2ng ci4 ngSki m2a E*Xng cSdc
s dZng c]n bht E bivn p*Rp bo *` p*Rp lz nUo trong trSkng *dp ngSki bRn vi
p*fm *dp cgng trSTc E*i t*ki *fn b[ s2ng E]t t*tc. T2 n*iVn4 nga c trong
trSkng *dp nU ngSki m2a cng E*Xng mht M2^n ci bgi t*Skng t*ivt *fi do
ngSki bRn c*_m tr trong vivc t*ac *ivn ng*}a vZ.
Ar!"#e 0-
1. S2bGect to /rticle #34 t*e seller ma4 even a0ter t*e date 0or deliver4 remed
at *is own expense an 0ail2re to per0orm *is obligations4 i0 *e can do so
wit*o2t 2nreasonable dela and wit*o2t ca2sing t*e b2er 2nreasonable
inconvenience or 2ncertaint o0 reimb2rsement b t*e seller o0 expenses
advanced b t*e b2er. 6owever4 t*e b2er retains an rig*t to claim damages
as provided 0or in t*is 8onvention.
2. I0 t*e seller reM2ests t*e b2er to maEe Enown w*et*er *e will accept
per0ormance and t*e b2er does not compl wit* t*e reM2est wit*in a
reasonable time4 t*e seller ma per0orm wit*in t*e time indicated in *is
reM2est. T*e b2er ma not4 d2ring t*at period o0 time4 resort to an remed
w*ic* is inconsistent wit* per0ormance b t*e seller.
F. / notice b t*e seller t*at *e will per0orm wit*in a speciKed period o0 time is
ass2med to incl2de a reM2est4 2nder t*e preceding paragrap* 24 t*at t*e b2er
maEe Enown *is decision.
#. / reM2est or notice b t*e seller 2nder paragrap* !2$ or !F$ o0 t*is article is
not eNective 2nless received b t*e b2er.
A!SN 0-.
1. T*eo ctng M2 c\n* cWa ei^2 #34 ngSki bRn ci t*n4 nga c sa2 E*i *]t t*ki
*fn giao *Ung4 lofi tr| mji t*i]2 sit trong vivc t*ac *ivn ng*}a vZ cWa mqn*4
vTi ci^2 Eivn lU vivc lUm ci E*Xng Eo dUi sa c*_m tr vX lz vU E*Xng g~ ra
c*o ngSki m2a n*Yng trp ngfi *a tqn* *qn* bht c\n* vX lz trong vivc *oUn
tr cRc p*x t[n mU ngSki bRn p*i t*ac *ivn c*o ngSki m2a. T2 n*iVn ngSki
m2a vn giY ng2Vn M2^n ci bgi t*Skng t*ivt *fi c*i]2 t*eo 8Xng STc nU.
2. -]2 ngSki bRn V2 cl2 ngSki m2a c*o bi]t lU ngSki m2a ci c*hp n*_n vivc
lofi tr| t*i]2 sit nii trVn cWa ngSki bRn *a E*Xng vU n]2 ngSki m2a E*Xng
cRp mng V2 cl2 nU trong m`t t*ki *fn *dp lz t*q ngSki bRn ci t*n t*ac
*ivn vivc lofi tr| t*i]2 sit ci trong t*ki *fn mU ngSki bRn cy g*i trong V2
cl2. ngSki m2a E*Xng t*n4 trong t*ki *fn ci s dZng bht cm bivn p*Rp bo
*` p*Rp lz nUo E*Xng t*xc* *dp c*o vivc t*ac *ivn ng*}a vZ cWa ngSki bRn.
F. -]2 ngSki bRn t*Xng bRo rng ngSki bRn s t*ac *ivn vivc lofi tr| t*i]2 sit
trong m`t t*ki *fn hn c\n* t*q t*Xng bRo nii trVn bao ggm c V2 cl2 ngSki
m2a c*o bi]t *j c*hp n*_n vivc lofi tr| t*i]2 sit *a E*Xng4 c*i]2 t*eo M2
c\n* cWa E*on 2 nii trVn.
#. ?V2 cl2 *a t*Xng bRo cWa ngSki bRn t*eo E*on 2 *a F cWa ei^2 E*on
nU s E*Xng ci *iv2 lac n]2 ngSki m2a E*Xng n*_n cSdc ni.
Ar!"#e 09
1. T*e b2er ma declare t*e contract avoided
!a$ I0 t*e 0ail2re b t*e seller to per0orm an o0 *is obligations 2nder t*e
contract or t*is 8onvention amo2nts to a 02ndamental breac* o0 contractL or
!b$ In case o0 non&deliver4 i0 t*e seller does not deliver t*e goods wit*in t*e
additional period o0 time Kxed b t*e b2er in accordance wit* paragrap* !1$ o0
article #' or declares t*at *e will not deliver wit*in t*e period so Kxed.
2. 6owever4 in cases w*ere t*e seller *as delivered t*e goods. T*e b2er loses
t*e rig*t to declare t*e contract avoided 2nless *e does so<
!a$ In respect to late deliver4 wit*in a reasonable time a0ter *e *as become
aware t*at deliver *as been madeL
!b$ In respect o0 an breac* ot*er t*an late deliver4 wit*in a reasonable time<
!c$ a0ter *e Enew or o2g*t to *ave Enown o0 breac*L
!d$ a0ter t*e expiration o0 an additional period o0 time Kxed b t*e b2er in
accordance wit* paragrap* !1$ o0 /rticle #'. or a0ter t*e seller *as declared t*at
*e will not per0orm *is obligations wit*in s2c* an additional periodL or
!e$ a0ter t*e expiration o0 an additional period o0 time indicated b t*e seller in
accordance wit* paragrap* !2$ o0 /rticle #"4 or a0ter t*e b2er declared t*at *e
will not accept per0ormance.
A!SN 09.
1. -gSki m2a ci t*n t2Vn bb *W *dp cgng
a$ n]2 vivc ngSki bRn E*Xng t*ac *ivn bht cm ng*}a vZ nUo p*Rt sin* t| *dp
cgng *a t| 8Xng STc nU ch2 t*Un* m`t vi p*fm co bn c]n *dp cgngL *o{c
b$ trong trSkng *dp E*Xng giao *Ung4 n]2 ngSki bRn E*Xng giao *Ung trong t*ki
gian cy cSdc ngSki m2a gia *fn t*Vm c*o *j t*eo E*on 1 ei^2 #' *o{c n]2
ngSki bRn t2Vn bb s E*Xng giao *Ung trong t*ki *fn b[ s2ng ci.
2. T2 n*iVn trong trSkng *dp ngSki bRn cy giao *Ung4 ngSki m2a s mht M2^n
*W *dp cgng tr| E*i ngSki m2a cy t2Vn bb *W *dp cgngL
a$ E*i *Ung giao c*_m4 trong m`t t*ki *fn *dp lz En t| ltc ngSki m2a cy bi]t
rng vivc giao *Ung cy cSdc t*ac *ivn
b$ cbi vTi mji trSkng *dp vi p*fm E*Xng p*i giao *Ung c*_m tr4 trong m`t
t*ki *fn *dp lz
i$ En t| ltc ngSki m2a cy bi]t *a cRng l p*i bi]t v^ sa vi p*fm ciL
ii$ sa2 E*i cy *]t t*ki *fn b[ s2ng c*o ngSki bRn t*eo E*on 1 ei^2 #' *o{c sa2
E*i ngSki bRn cy t2Vn bb rng *j s E*Xng t*ac *ivn ng*}a vZ cWa mqn* trong
t*ki *fn cy cSdc gia *fn ciL *o{c
11$ sa2 E*i cy *]t t*ki *fn b[ s2ng mU ngSki bRn cy c* r t*eo E*on 2 ei^2
#" *o{c sa2 E*i ngSki m2a cy t2Vn bb rng *j E*Xng c*hp n*_n t*ac *ivn
ng*}a vZ.
Ar!"#e *.. I0 t*e goods do not con0orm wit* t*e contract and w*et*er or not
t*e price *as alread been paid4 t*e b2er ma red2ce t*e price in t*e same
proportion as t*e val2e t*at t*e goods act2all delivered *ad at t*at time o0 t*e
deliver bears to t*e val2e t*at con0orming goods wo2ld *ave *ad at t*e time.
6owever4 i0 t*e seller remedies an 0ail2re to per0orm *is obligations in
accordance wit* /rticle F' or /rticle #" or i0 t*e b2er re02ses to accept
per0ormance b t*e seller in accordance wit* t*ose /rticles4 t*e b2er ma not
red2ce t*e price.
A!SN *.. Trong trSkng *dp *Ung *ia E*Xng p*s *dp vTi *dp cgng bht En ti^n
*Ung cy cSdc tr *a c*Sa4 ngSki m2a ci t*n gim giR *Ung t*eo t lv cn cm
vUo sa sai bivt giYa giR tr\ t*ac cWa *Ung *ia vUo ltc giao *Ung vU giR tr\ cWa
*Ung *ia n]2 *Ung p*s *dp vTi *dp cgng vUo ltc giao *Ung. T2 n*iVn4 n]2
ngSki bRn lofi tr| mji t*i]2 sit trong vivc t*ac *ivn mji ng*}a vZ t*eo ei^2 F'
*o{c ei^2 #" *o{c n]2 ngSki m2a t| c*bi c*hp n*_n vivc t*ac *ivn cWa ngSki
bRn t*eo cRc ci^2 E*on nU t*q ngSki m2a E*Xng cSdc gim giR *Ung.
Ar!"#e *1. I0 t*e seller delivers onl a part o0 t*e goods or i0 onl a part o0 t*e
goods delivered is in con0ormit wit* t*e contract4 /rticle #( to %0 appl in
respect o0 t*e part w*ic* is missing or w*ic* does not con0orm.
1. T*e b2er ma declare t*e contract avoided in its entiret onl i0 t*e 0ail2re
to maEe deliver completel or in con0ormit wit* t*e contract amo2nts to a
02ndamental breac* o0 t*e contract.
A!SN *1.
1. -]2 ngSki bRn c* giao m`t p*ln *Ung *ia *oc n]2 c* m`t p*ln *Ung *ia
cy giao p*s *dp vTi *dp cgng t*q cRc ei^2 #( c]n %0 s cSdc Rp dZng cbi
vTi p*ln *Ung *ia t*i]2 *o{c p*ln *Ung *ia E*Xng p*s *dp vTi *dp cgng.
2. -gSki m2a c* cSdc t2Vn bb *W b toUn b` *dp cgng n]2 vivc E*Xng t*ac
*ivn *dp cgng *o{c m`t p*ln *Ung giao E*Xng p*s *dp vTi *dp cgng ch2
t*Un* m`t sa vi p*fm co bn *dp cgng.
Ar!"#e *%
1. I0 t*e seller delivers t*e goods be0ore t*e date Kxed4 t*e b2er ma taEe
deliver or re02se to taEe deliver.
2. I0 t*e seller delivers a M2antit o0 goods greater t*an t*at provided 0or in t*e
contract4 t*e b2er ma taEe deliver or re02se to taEe deliver o0 t*e excess
M2antit. II t*e b2er taEes deliver o0 all or part o0 t*e excess M2antit4 *e
m2st pa !or it at t*e contract rate.
A!SN *%.
1. -]2 ngSki bRn giao *Ung trSTc t*ki *fn M2 c\n* t*q ngSki m2a cSdc M2^n
c*hp n*_n *o{c t| c*bi vivc giao *Ung ci.
2. -]2 ngSki bRn giao m`t sb lSdng n*i^2 *on sb lSdng M2 c\n* trong *dp
cgng4 ngSki m2a ci t*n c*hp n*_n *a t| c*bi sb lSdng vSdt tr`i nii trVn.
-]2 ngSki m2a c*hp n*_n toUn b` *a m`t p*ln sb lSdng vSdt tr`i nii trVn
t*q ngSki m2a p*i tr ti^n *Ung vSdt tr`i t*eo giR *dp cgng M2 c\n*.
C5a7er III. OB2IGATIONS OF T1E BUYER
Ar!"#e *'. T*e b2er m2st pa t*e price 0or t*e goods and laEe deliver o0
t*em as reM2ired b t*e contract and t*is 8onvention.
C5WXn3 III. N35[a 8\ "]a n3W^! 4Na
A!SN *'. -gSki m2a ci ng*}a vZ t*an* toRn ti^n *Ung vU n*_n *Ung t*eo M2
c\n* cWa *dp cgng vU cWa 8Xng STc nU. .
Se"!on I. @aJ4en o6 5e @r!"e
Ar!"#e *0. T*e b2er)s obligation to pa t*e price incl2des taEing s2c* steps
and compling wit* s2c* 0ormalities as ma be reM2ired 2nder t*e contract or
ant laws and reg2lation to enable pament to be made.
M\" I. T5an5 o_n !Sn 5`n3
A!SN *0. -g*}a vZ t*an* toRn ti^n *Ung cWa ngSki m2a bao ggm vivc Rp dZng
cRc bivn p*Rp vU *oUn c*n* cRc t*W tZc t*eo V2 cl2 cWa *dp cgng *o{c l2_t lv
cn ci t*n t*ac *ivn vivc tr ti^n *Ung.
Ar!"#e **. P*ere a contract *as been validl concl2ded b2t does not expressl
or implicitl Kx or maEe provision 0or determining tlie price4 t*e parlies are
considered4 in t*e absence o0 an indication to t*e contrar4 to *ave impliedl
maEe re0erence to t*e price generall c*arged at t*e lime o0 t*e concl2sion t*e
contract tor s2c*) goods sold 2nder comparable circ2mstances in t*e trade
concerned.
A!SN **. Q*i *dp cgng cy cSdc Ez E]t m`t cRc* *dp p*Rp4 n*Sng E*Xng M2
c\n* giR c m`t cRc* trac ti]p *o{c giRn ti]p4 *o{c E*Xng M2 c\n* cRc* xRc
c\n* giR tr\ cRc bVn4 tr| p*i ci sa M2 c\n* ngSdc lfi cSdc coi lU cy ci ngZ z daa
vUo giR cy cSdc hn c\n* c*o lofi *ia n*S v_ E*i *Ung *ia nU cSdc cem bRn
trong n*Yng ci^2 Eivn tSong ta cWa ngUn* b2Xn bRn *Y2 M2an.
Ar!"#e *+. I0 t*e price is Kxed according to t*e weig*t o0 t*e goods4 in case o0
do2bt it is to be determined b t*e net weig*t.
A!SN *+. -]2 giR c cSdc hn c\n* t*eo trjng lSdng cWa *Ung *ia t*q trong
trSkng *dp ci ng*i ngk4 giR s cSdc xRc c\n* t*eo trjng lSdng t\n*.
Ar!"#e *,. I0 t*e b2er is not bo2nd to pa t*e price at an ot*er partic2lar
place4 *e m2st pa It to t*e seller<
1. /t t*e seller)s place o0 b2siness4 or
2. I0 t*e pament is to be made against t*e *anding over o0 t*e goods or o0
doc2ments4 at t*e place w*ere t*e *anding over taEes place.
F. T*e seller m2st bear an increase in t*e expenses incidental to pament
w*ic* is ca2sed b a c*ange in *is place o0 b2siness s2bseM2ent to t*e
concl2sion o0 t*e contract.
A!SN *,.
1. -]2 ngSki m2a E*Xng ci ng*}a vZ t*an* toRn ti^n *Ung tfi m`t c\a cinm nUo
ci t*q *j p*i tr ti^n c*o ngSki bRn
a$ tfi trZ sp t*Song mfi cWa ngSki bRnL *a
b$ tfi noi giao *Ung *o{c giao c*mng t| n]2 vivc tr ti^n cSdc t*ac *ivn E*i giao
*Ung *o{c giao c*mng t|.
2. -gSki bRn p*i c*\2 sa gia tng p*x t[n cn t*ac *ivn vivc t*an* toRn do sa
t*a c[i c\a cinm trZ sp t*Song mfi cWa mqn* sa2 E*i *dp cgng cSdc Ez E]t.
Ar!"#e *-
1. I0 t*e b2er Is not bo2nd to pa t*e price at an ot*er speciKc time4 *e m2st
pa it w*en t*e seller places eit*er t*e goods or doc2ment controlling t*eir
disposition at t*e b2er)s disposal in accordance wit* t*e contract and t*is
8onvention. T*e seller ma maEe s2c* pament a condition 0or *anding over
t*e goods or doc2ments.
2. I0 t*e contract Involves carriage o0 t*e goods4 t*e seller ma dispatc* t*e
goods on terms w*ereb t*e goods4 or doc2ments controlling t*eir
disposition4 will not be *anded over to t*e b2er except against pament o0
t*e price.
F. T*e b2er Is not bo2nd to pa t*e price 2ntil *e *as *ad an opport2nit to
examine t*e goods4 2nless t*e proced2res 0or deliver or pament agreed
2pon b t*e parties are inconsistent wit* *is *aving s2c* an opport2nit.
A!SN *-.
1. -]2 ngSki m2a E*Xng ci ng*}a vZ tr ti^n vUo m`t t*ki *fn n*ht c\n*4 t*q
ngSki m2a p*i tr E*i4 t*eo *dp cgng vU 8Xng STc nU4 ngSki bRn c{t *o{c
*Ung *ia *o{c cRc c*mng t| n*_n *Ung dSTi M2^n c\n* coft cWa ngSki m2a.
-gSki bRn ci t*n cSa ra ci^2 Eivn p*i t*an* toRn n*S v_ cn c[i lfi vivc giao
*Ung *o{c c*mng t|.
2. -]2 *dp cgng M2 c\n* vivc c*2Vn c* *Ung *ia4 ngSki bRn ci t*n gi *Ung
vTi ci^2 Eivn lU *Ung *a c*mng t| n*_n *Ung c* cSdc giao c*o ngSki m2a E*i
ngSki m2a t*an* toRn ti^n *Ung.
Ar!"#e *9. T*e b2er m2st pa t*e price on t*e dale Kxed b or determinable
0rom t*e contract and t*is 8onvention wit*o2t t*e need 0or an reM2est or
compliance wit* an 0ormalit on t*e part o0 t*e seller.
A!SN *,. -gSki m2a p*i tr ti^n vUo ngU M2 c\n* *o{c ci t*n cSdc xRc c\n*
t*eo *dp cgng vU 8Xng STc nU mU E*Xng cln V2 cl2 *a t*ac *ivn m`t t*W
tZc nUo E*Rc v^ p*xa ngSki bRn.
Se"!on II. Tan!n3 de#!8erJ
M\" II. N5On 5`n3
Ar!"#e +.. T*e b2er)s obligation to taEe deliver consists<
!a$ In doing all t*e acts w*ic* co2ld reasonabl be expected o0 *im In order to
enable t*e seller to maEe deliverL and
!b$ In taEing over t*e goods.
A!SN +.. -g*}a vZ n*_n *Ung cWa ngSki m2a ggm
a$ t*ac *ivn mji *Un* vi ti]p t*eo m`t cRc* *dp lz cn c*o p*p ngSki bRn t*ac
*ivn vivc giao *UngL vU
b$ ti]p n*_n *Ung *ia. .
Se"!on III. Re4ed!es 6or /rea"5 o6 "onra" /J 5e /NJer
Ar!"#e +1
1. I0 t*e b2er 0alls to per0orm an o0 *is obligations 2nder t*e contract or t*is
8onvention4 t*e seller ma<
!a$ exercise t*e rig*t provided In /rticle (2 to (%.
!b$ claim damages as provided In /rticle '# to ''.
2 T*e seller Is not deprived o0 an rig*t *e ma *ave to claim damages b
exercising *is rig*t to ot*er remedies.
F -o period o0 grace ma be granted to t*e b2er b a co2rt or arbitral trib2nal
w*en t*e seller resorts to a remed tor breac* o0 contract.
M\" III. C_" /!hn 75_7 /io 5j 75_7 #k ron3 rW^n3 5f7 n3W^! 4Na 8!
75l4 5f7 Qmn3
A!SN +1.
1. -]2 ngSki m2a E*Xng t*ac *ivn m`t ng*}a vZ nUo ci t*eo *dp cgng m2a bRn
*a 8Xng STc nU4 t*q ngSki bRn ci t*n
a$ t*ac *ivn cRc M2^n M2 c\n* tfi ei^2 (2 vU (%
b$ ci bgi t*Skng t*ivt *fi n*S M2 c\n* tfi cRc ei^2 t| '# c]n ''
2. -gSki bRn E*Xng mht M2^n ci bgi t*Skng t*ivt *fi E*i *j s dZng M2^n
cSdc Rp dZng cRc bivn p*Rp bo *` p*Rp lz E*Rc.
F. Q*Xng m`t t*ki *fn tng t*Vm nUo ci t*n cSdc ta Rn *a trjng tUi ban c*o
ngSki m2a E*i ngSki bRn Rp dZng m`t bivn p*Rp bo *` p*Rp lz trong trSkng
*dp ngSki m2a vi p*fm *dp cgng.
Ar!"#e +%. T*e seller ma reM2ire t*e b2er to pa t*e price4 taEe deliver or
per0orm *is ot*er obligations4 2nless t*e seller *as resorted to a remed w*ic*
Is inconsistent wit* t*is reM2irement.
A!SN +%. -gSki bRn ci t*n V2 cl2 ngSki m2a tr ti^n4 n*_n *Ung *a t*ac
*ivn cRc ng*}a vZ E*Rc tr| p*i ngSki bRn s dZng m`t bivn p*Rp bo *` p*Rp lz
E*Rc E*Xng t*xc* *dp vTi cRc V2 cl2 ci.
Ar!"#e +'
1. T*e seller ma Kx .an additional period o0 time o0 reasonable lengt* 0or
per0ormance b t*e b2er o0 *is obligations.
2. 2nless t*e seller *as received notice 0rom t*e b2er t*at *e will not per0orm
wit*in t*e period so Kxed4 t*e seller ma not. d2ring t*at period4 resort to an
remed 0or breac* o0 contract. 6owever4 t*e seller is not deprived t*ereb o0
an rig*t *e ma *ave to claim damages 0or dela in per0ormance.
A!SN +'.
1. -gSki bRn ci t*n hn c\n* c*o ngSki m2a m`t t*ki *fn b[ s2ng *dp lz cn t*ac
*ivn ng*}a vZ cWa mqn*.
2. Tr| p*i n*_n cSdc t*Xng bRo cWa ngSki m2a c*i bi]t s E*Xng t*ac *ivn
ng*}a vZ trong t*ki gian h4 ngSki bRn trong t*ki *fn ci E*Xng t*n Rp dZng bht
cm m`t bivn p*Rp bo *` p*Rp lz nUo trong trSkng *dp ngSki m2a vi p*fm *dp
cgng. T2 n*iVn4 ngSki bRn E*Xng vq t*] mU mht M2^n ci bgi t*Skng t*ivt *fi
vq ngSki m2a c*_m t*ac *ivn ng*}a vZ.
Ar!"#e +0
1. T*e seller ma declare t*e contract avoided
!a$ i0 t*e 0ail2re b t*e b2er to per0orm an o0 *is obligations 2nder me
contract or t*is 8onvention amo2nts to a 02ndamental breac* o0 contractL or
!b$ i0 t*e b2er does not4 wit*in t*e additional period o0 time Kxed b t*e seller
in accordance wit* paragrap* !1$ o0 /rticle (F4 per0orm *is obligation to pa t*e
price or taEe deliver o0 t*e goods4 or i0 *e declares t*at *e will not do so wit*in
t*e period so&Kxed.
2. 6owever4 In cases w*ere t*e b2er *as paid t*e price4 t*e seller4 loses t*e
rig*t to declare t*e contract avoided 2nless *e does so
!a$ In respect o0 late per0ormance b t*e b2er4 be0ore t*e seller *as become
rendered< or
!b$. In respect o0 an breac* ot*er t*an late per0ormance b t*e b2er4 wit*in a
reasonable time
!c$ a0ter t*e seller Enew or o2g*t to *ave Enown o0 t*e breac*L or
!d$ a0ter t*e expiration o0 an additional period o0 time Kxed b t*e seller In
accordance wit* paragrap* !1$ o0 /rticle (F4 or a0ter t*e b2er *as declared
t*at *e will not per0orm *is obligations wit*in s2c* an additional period.
A!SN +0.
1. -gSki bRn ci t*n t2Vn bb *W *dp cgng
a$ n]2 vivc E*Xng t*ac *ivn ng*}a vZ cWa ngSki m2a t*eo *dp cgng *a 8Xng
STc ch2 t*Un* m`t sa vi p*fm co bn *dp cgngL *o{c
b$ n]2 ngSki m2a E*Xng t*ac *ivn ng*}a vZ tr ti^n *o{c E*Xng n*_n *Ung
trong t*ki *fn b[ s2ng t*eo E*on 1 ei^2 (F *o{c n]2 ngSki m2a t2Vn bb s
E*Xng lUm vivc ci trong t*ki *fn h.
2. T2 n*iVn trong n*Yng trSkng *dp ngSki m2a cy tr ti^n4 ngSki bRn mht mht
M2^n t2Vn bb *W *dp cgng tr| E*i ngSki bRn lUm cy n*S v_4
a$ trong trSkng *dp ngSki m2a c*_m t*ac *ivn ng*}a vZ I *o{c E*i ngSki bRn
bi]t rng ng*}a vZ cy cSdc t*ac *ivnL *o{c
b$ trong trSkng *dp ngSki m2a vi p*fm bht cm ng*}a vZ E*Rc ngoUi vivc c*_m
tr I trong m`t t*ki *fn *dp lz4
i$ En t| ltc ngSki bRn cy bi]t *a cRng l p*i bi]t sa vi p*fm ci4 *o{c
ii$ sa2 E*i E]t t*tc t*ki *fn b[ s2ng t*eo E*on 1 ei^2 (F *a sa2 E*i ngSki
m2a cy t2Vn bb rng *j s E*Xng t*ac *ivn ng*}a vZ cWa mqn* trong t*ki *fn
b[ s2ng ci.
Ar!"#e +*
1. I0 2nder t*e contract t*e b2er is to speci0 t*e 0orm4 meas2rement or ot*er
0eat2res o0 t*e goods and *e 0ails to maEe s2c* speciKcation eit*er on t*e
date agreed 2pon or wit*in a reasonable time a0ter receipt o0 a reM2est 0rom
t*e seller4 t*e seller ma4 wit*o2t preG2dice to an ot*er rig*ts *e ma *ave4
maEe t*e speciKcation *imsel0 in accordance wit* t*e reM2irements o0 t*e
b2er t*at ma be Enown to *im.
2. i0 t*e seller maEes t*e speciKcation *imsel04 *e m2st in0orm t*e b2er o0 t*e
details t*ereo0 and m2st Kx a reasonable time wit*in w*ic* t*e b2er ma
maEe a diNerent speciKcation. I0 .a0ter receipt o0 s2c* a comm2nication4 t*e
b2er 0alls to do so wit*in t*e time so Kxed4 t*e speciKcation made b t*e
seller is binding.
A!SN +*.
1. -]2 t*eo *dp cgng4 ngSki m2a p*i xRc c\n* *qn* dRng4 Exc* t*STc *a
n*Yng c{c cinm E*Rc cWa *Ung *ia vU n]2 ngSki m2a E*Xng lUm ci^2 ci vUo
t*ki gian t*a t*2_n *a trong m`t t*ki *fn *dp lz En t| E*i n*_n cSdc V2 cl2
cWa ngSki bRn4 t*q ngSki bRn ci t*n ta mqn* xRc c\n* *Ung *ia t*eo ctng n*2
cl2 cWa ngSki m2a mU ngSki bRn ci t*n bi]t mU E*Xng lUm p*Song *fi c]n cRc
M2^n ldi E*Rc.
2. -]2 ngSki bRn ta mqn* xRc c\n* *Ung *ia4 *j p*i bRo c*i ti]t c*o ngSki m2a
n`i d2ng vivc xRc c\n* ci vU hn c\n* m`t t*ki *fn *dp lz cn ngSki m2a ci t*n
cSa ra cRc c*i ti]t E*Rc cWa *Ung *ia. -]2 sa2 E*i n*_n cSdc t*Xng bRo ci mU
ngSki m2a E*Xng xRc c\n* c*i ti]t *Ung *ia trong t*ki *fn nii trVn t*q sa xRc
c\n* *Ung *ia do ngSki bRn t*ac *ivn ci txn* c*ht bwt b2`c.
C5a7er IV. @ASSING OF T1E RISK
C5WXn3 IV. C5NJRn r]! ro
Ar!"#e ++. +oss o0 or damage to t*e goods a0ter t*e risE *as passed to t*e
b2er does not disc*arge *im 0rom *is obligation to pa t*e price4 2nless t*e
loss or damage is d2e to an act or omission o0 t*e seller.
A!SN ++. T*ht t*oRt *a *S *ng *Ung *ia x ra sa2 E*i rWi ro c*2nn sang
ngSki m2a E*Xng min tr| c*o ngSki m2a ng*}a vZ tr ti^n4 tr| p*i t*ht t*oRt
*a *S *ng *Ung ci lU do *Un* c`ng *a sa t*i]2 trRc* n*ivm cWa ngSki bRn
g~ ra.
Ar!"#e +,
1. I0 t*e contract o0 sale Involves carriage o0 t*e goods and t*e seller Is not
bo2nd to *and t*em over at a partic2lar place4 t*e risE passes to t*e b2er
w*en t*e goods are *anded over to t*e Krst carrier 0or transmission to t*e b2er
in accordance wit* t*e contract o0 sale. I0 t*e seller is bo2nd to *and t*e goods
over to a carrier at a partic2lar place4 t*e risE does not pass to t*e b2er 2ntil to
t*e carrier at t*at place. T*e 0act t*at t*e seller is a2t*oriDed to retain
doc2ments controlling t*e disposition o0 t*e goods does not aNect t*e passage
o0 t*e risE.
2. -evert*eless4 t*e risE does not pass to t*e b2er 2ntil t*e goods are clearl
identiKed to t*e contract4 w*et*er b marEings on t*e goods4 b s*ipping
doc2ments4 b notice given to t*e b2er or ot*erwise.
A!SN +,.
1. -]2 *dp cgng m2a bRn M2 c\n* vivc v_n c*2nn *Ung *ia vU ngSki bRn
E*Xng b\ b2`c p*i giao *Ung tfi noi M2 c\n*4 rWi ro cSdc c*2nn sang ngSki
m2a En t| ltc *Ung cSdc giao c*o ngSki c*2Vn c* t*m n*ht cn c*2nn c*o
ngSki m2a t*eo *dp cgng m2a bRn. -]2 ngSki bRn b2`c p*i giao *Ung c*o
m`t ngSki c*2Vn c* tfi m`t noi M2 c\n*4 rWi ro E*Xng cSdc c*2nn c*o
ngSki m2a c*o c]n E*i *Ung *ia cSdc giao c*o ngSki c*2Vn c* tfi noi ci.
Vivc ngSki bRn cSdc p*p giY lfi cRc c*mng t| n*_n *Ung E*Xng n* *Spng
c]n vivc c*2nn giao rWi ro.
2. T2 n*iVn rWi ro E*Xng cSdc c*2nn sang c*o ngSki m2a n]2 *Ung *ia E*Xng
cSdc p*~n c\n* r rUng t*eo *dp cgng bng cRc* g*i Ez my *iv2 trVn *Ung
*ia4 bng cRc c*mng t| v_n ti4 bng m`t t*Xng bRo gi c*o ngSki m2a *o{c
bng n*Yng cRc* t*mc E*Rc.
Ar!"#e +-. T*e risE in respect o0 goods sold in transit passes to t*e b2er 0rom
t*e concl2sion o0 t*e contract. 6owever4 i0 t*e circ2mstances so indicate4 t*e
risE is ass2med b t*e b2er 0rom t*e time t*e goods were *anded over to t*e
carrier w*o iss2ed t*e doc2ments emboding t*e contract o0 carriage.
-evert*eless4 i0 at t*e time o0 t*e concl2sion o0 t*e contract o0 sale4 t*e seller
Enew or o2g*t to *ave Enown t*at t*e goods *ad been lost or damaged and did
not disclose t*is to t*e b2er4 t*e loss or damage is at t*e risE o0 t*e seller.
A!SN +-. 1Wi ro v^ *Ung *ia cy bRn trVn cSkng v_n c*2nn cSdc c*2nn sang
c*o ngSki m2a4 En t| E*i Ez E]t *dp cgng. -*Sng trong cRc trSkng *dp cln t*i]t
n*S cy nV24 ngSki m2a p*i n*_n rWi ro v^ mqn* En t| E*i *Ung cSdc giao c*o
ngSki c*2Vn c* lU ngSki Ez p*Rt cRc c*mng t| xRc n*_n vivc t*ac *ivn *dp
cgng c*2Vn c*. T2 n*iVn4 n]2 vUo ltc Ez E]t *jp cgng m2a bRn4 ngSki bRn
cy bi]t *o{c cRng l p*i bi]t v^ sa Eivn *Ung *ia cy b\ mht *a *S *ng vU cy
E*Xng t*Xng bRo c*o ngSki m2a v^ ci^2 ci t*q vivc t*ht t*oRt *a *S *ng *Ung
*ia do ngSki bRn p*i gRn* c*\2.
T5ere are so4e 4!sanes !n 5e V!ena4ese rans#a!on. 1o9 do JoN
"ore" 5e rans#aed 8ers!on a""ord!n3 o 5e En3#!s5 or!3!na#o
Ar!"#e +9
1. In cases not wit*in /rticle (' and ("4 t*e risE passes to t*e b2er w*en *e
taEes over t*e goods or4 i0 *e does not do so in d2e time4 0rom t*e time w*en
t*e goods are placed at *is disposal and *e commits a breac* o0 contract b
0ailing to taEe deliver.
2. 6owever4 i0 t*e b2er is bo2nd to taEe over t*e goods at a place ot*er t*an a
place o0 b2siness o0 t*e seller4 t*e risE passes w*en deliver is d2e and t*e
b2er is aware o0 t*e 0act t*at t*e goods are placed at *is disposal at t*at place.
F. I0 t*e contract relates to goods not t*en identiKed4 t*e goods are considered
not to be placed at t*e disposal o0 t*e b2er 2ntil t*e are clearl identiKed to
t*e contract.
A!SN +9.
1p Trong cRc trSkng *dp E*Xng cSdc nV2 tfi ei^2 (' vU ("4 rWi ro cSdc
c*2nn sang ngSki m2a E*i ngSki nU n*_n *Ung *o{c n]2 ngSki m2a
E*Xng lUm vivc nU ctng t*ki *fn M2 c\n* En t| ltc *Ung cSdc c{t dSTi
M2^n c\n* coft cWa ngSki m2a vU ngSki m2a cy vi p*fm *dp cgng vq
E*Xng c*\2 n*_n *Ung.
%p T2 n*iVn4 n]2 ngSki m2a b\ b2`c p*i n*_n *Ung tfi m`t noi E*Xng p*i
lU trZ sp t*Song mfi cWa ngSki bRn4 rWi ro cSdc c*2nn E*i vivc giao *Ung
p*i cSdc t*ac *ivn vU ngSki m2a bi]t rng *Ung cy cSdc c{t dSTi M2^n
c\n* coft cWa *j tfi noi ci.
'p -]2 *dp cgng m2a bRn liVn M2an c]n *Ung *ia c*Sa cSdc c\n* dfng4
*Ung c* cSdc coi lU cy c{t dSTi M2^n c\n* coft cWa ngSki m2a c*|ng
nUo c*tng cSdc tRc* bivt r rUng c*o mZc cxc* cWa *dp cgng.
Ar!"#e ,.. I0 t*e seller *as committed a 02ndamental breac* o0 contract4 /rticle
('4 (" and (3 do not impair t*e remedies available to t*e b2er on acco2nt o0
t*e breac*.
A!SN ,.. -]2 ngSki bRn vi p*fm co bn cbi vTi *dp cgng4 cRc M2 c\n* cWa
ci^2 ('4 ("4 (3 E*Xng n* *Spng c]n M2^n cWa ngSki m2a s dZng cRc bivn
p*Rp bo *` p*Rp lz trong trSkng *dp x ra vi p*fm ci.
C5a7er V. @ROVISIONS COMMON TO T1E OB2IGATIONS OF T1E SE22ER
AN$ OF T1E BUYER
Se"!on I. An!"!7aorJ /rea"5 and !nsa#4en "onra"s
C_" Q!SN n5oin "5Nn3 Qq! 8r! n35[a 8\ "]a n3W^! /_n 8` n3W^!
4Na.
M\" 1. V! 75l4 rWr" 8` "_" 5f7 Qmn3 3!ao 5`n3 bn3 75sn
Ar!"#e ,1
1. / part ma s2spend t*e per0ormance o0 *is obligations i04 a0ter t*e
concl2sion o0 t*e contract4 it becomes apparent t*at t*e ot*er part will not
per0orm a s2bstantial part o0 *is obligations as a res2lt o0<
!a$ a serio2s deKcienc in *is abilit to per0orm or in *is creditwort*inessL or
!b$ *is cond2ct in preparing to per0orm or in per0orming t*e contract.
2. i0 t*e seller *as alread dispatc*ed t*e goods be0ore t*e gro2nds described
in t*e preceding paragrap* become evident4 *e ma prevent t*e *anding over
o0 t*e goods to t*e b2er even t*o2g* t*e b2er *olds a doc2ment w*ic*
entitled *im to obtain t*em. T*e present paragrap* relates onl to t*e rig*t in
t*e goods as between t*e b2er and t*e seller.
F. / part s2spending per0ormance4 w*et*er be0ore or a0ter dispatc* o0 t*e
goods4 m2st immediatel give notice o0 t*e s2spension to t*e ot*er part and
m2st contin2e wit* per0ormance i0 t*e ot*er part provides adeM2ate ass2rance
o0 *is per0ormance.
A!SN ,1.
1. 9`t bVn ci t*n ngSng t*ac *ivn ng*}a vZ cWa mqn* n]2 ci dh2 *iv2 c*o t*h
sa2 E*i *dp cgng cSdc Ez E]t4 bVn Eia s E*Xng t*ac *ivn m`t p*ln c*W ]2
ng*}a vZ cWa *j do
a$ Sa E*i]m E*2]t ng*iVm trjng v^ E* nng t*ac *ivn *o{c v^ 2 txnL *o{c
b$ 82ng cRc* lUm vivc cWa bVn Eia trong vivc c*2un b\ t*ac *ivn *a trong E*i
t*ac *ivn *dp cgng4
2. -]2 ngSki bRn cy gi *Ung ci trSTc E*i n*_n ra n*Yng lz do nV2 trong mZc
trVn4 *j ci t*n ngn cn E*Xng cn *Ung *ia cSdc giao c*o ngSki m2a nga c
n]2 ngSki m2a nwm giY c*mng t| c*o p*p *j n*_n *Ung. 9Zc nU c* liVn M2an
c]n M2^n cWa ngSki m2a vU ngSki bRn cbi vTi *Ung *ia.
F. 9`t bVn ngSng t*ac *ivn *dp cgng ds trSTc *a sa2 E*i gWi *Ung4 p*i giY
nga m`t t*Xng bRo v^ vivc ci c*o bVn Eia vU p*i ti]p tZc t*ac *ivn *dp cgng
n]2 bVn Eia bo cm cl cW vivc t*a *ivn ng*}a vZ cWa *j.
Ar!"#e ,%
1. I0 prior to t*e date 0or per0ormance o0 t*e contract it is clear t*at one o0 t*e
parties will commit a 02ndamental breac* o0 contract4 t*e ot*er part ma
declare t*e contract avoided.
2. I0 time allows4 t*e part intending to declare t*e contract avoided m2st give
reasonable notice to t*e ot*er part m2rder to permit *im to provide adeM2ate
ass2rance o0 *is per0ormance.
F. T*e reM2irements o0 t*e preceding paragrap* do not appl i0 t*e ot*er part
*as declared t*at *e will not per0orm *is obligations.
A!SN ,%.
1. -]2 trSTc ngU M2 c\n* t*ac *ivn *dp cgng mU t*ac t] c*o t*h r rUng m`t
bVn s g~ ra vi p*fm co bn *dp cgng4 bVn Eia ci t*n t2Vn bb *W *dp cgng.
2. -]2 t*ki gian c*o p*p4 bVn nUo ci z c\n* t2Vn bb *dp cgng b\ *W t*q p*i
gi m`t t*Xng bRo *dp lz c*o bVn Eia cn c*o p*p *j bo cm cl cW vivc t*ac
*ivn ng*}a vZ cWa mqn*.
F. 8Rc M2 c\n* cWa E*on trVn E*Xng Rp dZng n]2 bVn Eia cy t2Vn bb rng *j
s E*Xng t*ac *ivn ng*}a vZ cWa mqn*.
Ar!"#e ,'
1. In t*e case o0 a contract 0or deliver o0 good b instalments4 i0 t*e 0ail2re o0
one part to per0orm an o0 *is obligations in respect o0 an instalment4
constit2tes a 02ndamental breac* o0 contract wit* respect to t*at instalment4
t*e ot*er part ma declare t*e contract avoided wit* respect to t*at
instalment.
2. I0 one part)s 0ail2re to per0orm an o0 *is obligations In respect o0 an
instalment gives t*e ot*er part good gro2nds to concl2de t*at a
02ndamental breac* o0 contract will occ2r wit* respect to 02t2re instalments4
*e ma declare t*e contract avoided 0or t*e 02t2re4 provided t*at *e does so
wit*in a reasonable time.
F. / b2er w*o declares t*e contract avoided in respect o0 an deliver ma at
t*e same time declare it avoided In respect o0 deliveries alread made or o0
02t2re deliveries i0 b reason o0 t*eir interdependence4 t*ose deliveries co2ld
not be 2sed 0or t*e p2rpose contemplated b t*e parties at t*e time o0 t*e
concl2sion o0 t*e contract.
A!SN ,'.
1. -]2 *dp cgng M2 c\n* giao *Ung t|ng p*ln vU n]2 vivc m`t bVn E*Xng t*ac
*ivn ng*}a vZ liVn M2an c]n m`t lX *Ung tfo nVn m`t sa vi p*fm co bn *dp
cgng v^ lX *Ung ci t*q bVn Eia ci t*n t2Vn bb *W *dp cgng v^ lX *Ung liVn
M2an.
2. -]2 m`t bVn E*Xng t*ac *ivn bht cm m`t ng*}a vZ ci liVn M2an c]n lX *Ung
nUo4 c*o p*p bVn Eia ci lz do xRc cRng cn E]t l2_n rng sa vi p*fm co bn *dp
cgng s xy ra cbi vTi cRc lX *Ung cSdc giao trong tSong lai4 bVn ci ci t*n t2Vn
bb *W *dp cgng cbi vTi cRc lX *Ung giao trong tSong lai vTi ci^2 Eivn p*i lUm
vivc ci trong m`t t*ki *fn *dp lz.
F. -gSki m2a E*i t2Vn bb *W *dp cgng cbi vTi bht E lX *Ung nUo4 ci t*n csng
m`t ltc t2Vn bb *dp cgng b\ *W cbi vTi cRc lX *Ung se cSdc giao trong tSong
lai n]2 do txn* liVn E]t cRc lX *Ung nU E*Xng t*n s dZng cSdc c*o n*Yng mZc
cxc* mU cRc bVn cy da txn* vUo ltc Ez E]t *dp cgng.
Se"!on II. $a4a3es
Ar!"#e ,0. Damages 0or breac* o0 contract b one part consist o0 a s2m eM2al
to t*e loss4 incl2ding loss o0 proKt s2Nered b t*e ot*er part as a conseM2ence
o0 t*e breac*. S2c* damages ma not exceed t*e loss w*ic* t*e part in breac*
0oresaw or o2g*t to *ave 0oreseen at t*e time o0 t*e concl2sion o0 t*e contract
in t*e lig*t o0 t*e 0acts and matters o0 w*ic* *e t*en Enew or o2g*t to *ave
Enown as a possible conseM2ence o0 t*e breac* o0 contract.
M\" %.
A!SN ,0.
Ar!"#e ,*. It t*e contract is avoided and i0 in a reasonable manner and wit*in a
reasonable time a0ter avoidance t*e b2er *as bo2g*t goods in replacement or
t*e seller *as resold t*e goods4 t*e part claiming damages ma recover t*e
diNerence between t*e contract price and t*e price in t*e s2bstit2te transaction
as well as an 02rt*er damages recoverable 2nder article '#.
A!SN ,*.
Ar!"#e ,+
1. I0 t*e contract is avoided and t*ere is a c2rrent price 0or t*e goods4 t*e part
claiming damages ma i0 *e *as not made a p2rc*ase or resale 2nder /rticle
'%4 recover t*e diNerence between t*e price Kxed b t*e contract and t*e
c2rrent price at t*e time o0 avoidance as well as an 02rt*er damages
recoverable 2nder /rticle '#. I04 *owever t*e part claiming damages *as
avoided t*e contract a0ter
taEing over t*e goods4 t*e c2rrent price at t*e time o0 s2c* taEing over s*all be
applied instead o0 t*e c2rrent price at t*e time o0 avoidance.
2. ,or t*e p2rposes o0 t*e preceding paragrap*4 t*e c2rrent price is t*e price
prevailing at t*e place w*ere deliver o0 t*e goods s*o2ld *ave been made or i0
t*ere is no c2rrent price at t*at place4 t*e price at s2c* ot*er place as severs as
a reasonable s2bstit2te maEing d2e allowance 0or diNerences in t*e costs o0
transporting t*e goods.
A!SN ,+.
1. Q*i *dp cgng b\ *W vU *Ung ci m`t mmc giR *ivn *Un*4 bVn ci bgi t*Skng
t*ivt *fi ci t*n4 n]2 *j cy E*Xng m2a *Ung t*a t*] *a bRn lfi t*eo ei^2 '%4
n*_n p*ln c*Vn* lvc* giR h c\n* cWa *dp cgng vU giR *ivn *Un* vUo ltc *W *dp
cgng csng mji E*on ti^n bgi t*Skng t*ivt *fi E*Rc ci t*n cSdc n*_n t*eo ei^2
'#. 9{c ds v_4 n]2 bVn ci bgi t*Skng t*ivt *fi cy t2Vn bb *W *dp cgng sa2
E*i cy ti]p n*_n t*q giR *ivn *Un* vUo ltc ti]p n*_n *Ung cSdc Rp dZng t*a c*o
giR *ivn *Un* vUo ltc *W *dp cgng.
2. VTi mZc cxc* cWa E*on nii trVn4 giR *ivn *Un* lU giR Rp dZng tfi noi mU vivc
giao *Ung cRng l p*i cSdc t*ac *ivn *o{c n]2 E*Xng ci giR *ivn *Un* tfi noi
ci4 lU giR Rp dZng tfi m`t noi E*Rc mU ngSki ta ci t*n dsng cn t*a t*] m`t
cRc* *dp lz ci txn* c]n sa c*Vn* lvc* trong c*i p*x c*2Vn c* *Ung *ia.
Ar!"#e ,,. / part w*o relies on a breac* o0 contract m2st taEe s2c* meas2res
as are reasonable in t*e circ2mstances to mitigate t*e loss incl2ding loss o0
proKt res2lting 0rom t*e breac*. I0 *e 0ails to taEe s2c* meas2res t*e part in
breac* ma claim a red2ction in t*e damages in t*e amo2nt b w*ic* t*e loss
s*o2ld
*ave been mitigated.
A!SN ,,. 9`t bVn vivn dn vi p*fm *dp cgng cWa bVn Eia4 p*i Rp dZng n*Yng
bivn p*Rp *dp lz cn cm vUo cRc tqn* *2bng cZ t*n cn *fn c*] t[n t*ht4 En c
E*on lyi b\ b l do sa vi p*fm *dp cgng g~ ra. -]2 *j E*Xng lUm ci^2 ci4 bVn
vi p*fm *dp cgng ci t*n V2 cl2 gim bTt m`t E*on ti^n bgi t*Skng t*ivt *fi
bng vTi mmc t[n t*ht mU l ra cy ci t*n *fn c*] cSdc.
Se"!on III. Ineres
Ar!"#e ,-. I0 a part 0ails to pa t*e price or an ot*er s2m t*at is in arrears4
t*e ot*er part is entitled to interest on it wit*o2t preG2dice to an claim 0or
damages recoverable 2nder article '#.
M\" '. T!Sn #L!
A!SN ,-. -]2 m`t bVn c*_m t*an* toRn ti^n *Ung *a mji E*on ti^n t*i]2
E*Rc4 bVn Eia ci M2^n ci ti^n li txn* trVn sb ti^n c*_m tr ci mU E*Xng n*
*Spng c]n M2^n ci bgi t*Skng t*ivt *fi cWa *j t*eo ei^2 '#.
Se"!on IV. E)e47!ons
Ar!"#e ,9. / part is not liable 0or a 0ail2re to per0orm an o0 *is obligations i0
*e proved t*at t*e 0ail2re was d2e to an impediment beond *is control and
t*at *e co2ld not reasonabl be expected to *ave taEen t*e impediment into
acco2nt at t*e time o0 t*e concl2sion o0 t*e 8ontract or to *ave avoided or
overcome it or its conseM2ences
1. I0 t*e part)s 0ail2re is d2e to t*e 0ail2re b a t*ird person w*om *e *as
engaged to per0orm4 t*e w*ole or a part o0 t*e 8ontract4 t*at part is exempt
0rom liabilit onl i0
!a$ *e is exempt 2nder t*e preceding paragrap*L and
!b$ t*e person w*om *e *as so engaged wo2ld be so exempt i0 t*e provision o0
t*at paragrap* were applied to *im.
2. T*e exemption provided b t*is /rticle *as eNect 0or t*e period d2ring w*ic*
t*e impediment exists.
F. T*e part w*o 0ails to per0orm m2st give notice to t*e ot*er part o0 t*e
impediment and its eNect on *is abilit to per0orm. I0 t*e notice is not
received b t*e ot*er part wit*in a reasonable time a0ter t*e part w*o
0ails to per0orm Enew or o2g*t to *ave Enown o0 t*e impediment4 *e is liable
0or damages res2lting 0rom s2c* non receipt.
#. -ot*ing in t*is article prevents eit*er part 0rom exercising an rig*t ot*er
t*an to claim damages 2nder t*is 8onvention.
M\" 0. M!tn r_"5
A!SN ,9.
1. 9`t bVn E*Xng c*\2 trRc* n*ivm v^ vivc E*Xng t*ac *ivn m`t ng*}a vZ cWa *j
n]2 c*mng min* cSdc rng vivc E*Xng t*ac *ivn ci la do m`t trp ngfi nm ngoUi
Einm soRt cWa *j vU E*Xng t*n ci *i m`t cRc* *dp lz rng *j p*i txn* tTi trp
ngfi ci vUo ltc Ez E]t *dp cgng *o{c p*i trRn* *a E*wc p*Zc cRc *_2 M2 ci.
2. -]2 m`t bVn E*Xng t*ac *ivn ng*}a vZ cWa mqn* do ngSki t*m F cam E]t t*ac
*ivn toUn b` *a m`t p*ln *dp cgng cng E*Xng t*ac *ivn ci^2 ci4 t*q bVn h
c* cSdc min trRc* trong trSkng *dp
a$ cSdc min trRc* t*eo M2 c\n* cWa E*on nii trVn4 vU
b$ n]2 ngSki t*m F cng s cSdc min trRc* n]2 cRc M2 c\n* cWa E*on trVn
cSdc Rp dZng c*o *j.
F. 9in trRc* t*eo ci^2 nU c* ci *iv2 lac trong t*ki gian tgn tfi trp ngfi ci.
#. 7Vn nUo E*Xng t*ac *ivn ng*}a vZ cWa mqn* t*q p*i bRo c*o bVn Eia bi]t v^
trp ngfi vU n* *Spng cWa ni cbi vTi E* nng t*ac *ivn ng*}a vZ. -]2 t*Xng
bRo cSdc bVn Eia n*_n trong t*ki *fn *dp lz En t| E*i bVn E*Xng t*ac *ivn ng*}a
vZ cy bi]t *a cRng l p*i bi]t trp ngfi trong vivc gi t*Xng bRo ci4 t*q bVn nU
p*i c*\2 trRc* n*ivm v^ n*Yng t*ivt *fi t| vivc bVn Eia E*Xng n*_n cSdc t*Xng
bRo.
%. -*Yng M2 c\n* cWa ci^2 E*on nU E*Xng cn trp mi bVn s dZng M2^n
E*Rc ngoUi M2^n coSdc bgi t*Skng t*ivt *fi t*eo 8Xng STc nU.
Ar!"#e -.. / part ma not rel on a 0ail2re o0 t*e ot*er part to per0orm to t*e
extent t*at s2c* 0ail2re was ca2sed b t*e Krst part)s act or omission.
A!SN -.. 8Rc bVn E*Xng cSdc vivn dn vivc E*Xng t*ac *ivn ng*}a vZ cWa bVn
Eia trong c*|ng mac mU sa vi p*fm ng*}a vZ ci lU do n*Yng *Un* vi *a so
s2ht cWa c*xn* bVn vivn dn.
Se"!on V. Eue" o6 A8o!dan"e
M\" V. 1ON YNi "]a 8!h" 5]J 5f7 Qmn3
Ar!"#e -1
1. /voidance o0 t*e contract releases bot* parties 0rom t*eir obligations 2nder it4
s2bGect to an damages w*ic* ma be d2e. /voidance does not aNect an
provisions o0 t*e contract 0or t*e settlement o0 disp2tes or an ot*er provisions o0
t*e contract governing t*e rig*ts and obligations o0 t*e parties conseM2ent 2pon
t*e avoidance o0 t*e contract.
2. / part w*o *as per0ormed t*e contract eit*er w*oll or in part ma claim
restit2tion 0orm t*e ot*er part o0 w*atever t*e Krst part *as s2pplied or paid
2nder t*e contract i0 bot* parties are bo2nd to maEe restit2tion t*e m2st do so
conc2rrentl.
A!SN -1.
1. Vivc *W *dp cgng gii p*ing *ai bVn E*i ng*}a vZ cWa *j4 tr| n*Yng E*on
bgi t*Skng t*ivt *fi ci t*n ci. Vivc *W *dp cgng E*Xng ci n* *Spng c]n M2
c\n* cWa *dp cgng vU gii M2]t tran* c*hp *a M2^n ldi vU ng*}a vZ cWa *ai bVn
trong trSkng *dp *dp cgng b\ *W.
2. 7Vn nUo cy t*ac *ivn toUn b` *a m`t p*ln *dp cgng ci t*n ci bVn Eia *oUn
lfi n*Yng gq mU *j c2ng chp *a cy t*an* toRn E*i t*ac *ivn *dp cgng. -]2 c *ai
bVn c^2 b\ b2`c p*i t*ac *ivn vivc *oUn lfi4 *j p*i csng m`t ltc t*ac *ivn vivc
ci.
Ar!"#e -%
1. T*e b2er loses t*e rig*t to declare t*e contract avoided or to reM2ire t*e
seller to deliver s2bstit2te goods i0 it is impossible 0or *im to maEe restit2tion o0
t*e goods s2bstantiall in t*e condition in w*ic* *e received t*em.
2. T*e preceding paragrap* does not appl
!a$ i0 t*e impossibillit o0 maEing restit2tion o0 t*e goods or o0 maEing
restit2tion o0 t*e goods s2bstantiall in t*e condition In w*ic* t*e b2er
received t*em is not d2e to *is act or omission.
!b$ i0 t*e goods or part o0 t*e goods *ave peris*ed or deteriorated as a res2lt o0
t*e examination provided 0or in article F"L or
!c$ i0 t*e goods or part o0 t*e goods *ave been sold in t*e normal co2rse o0
b2siness or *ave been cons2med or trans0ormed b t*e b2er in t*e co2rse o04
normal 2se be0ore *e discovered or o2g*t to *ave discovered t*e lacE o0
con0ormit.
A!SN -%.
1. -gSki m2a mht M2^n t2Vn bb *W b *dp cgng *a ci ngSki bRn p*i giao
*Ung t*a t*] n]2 *j E*Xng t*n *oUn lfi *Ung *ia trong tqn* trfng t*ac c*ht
ctng n*S E*i *j n*_n *Ung ci.
2. ei^2 E*on trVn E*Xng Rp dZng.
a$ -]2 vivc E*Xng t*n *oUn lfi *Ung *ia *o{c E*Xng t*n *oUn lfi trong tqn*
trfng v^ t*ac c*ht ctng n*S E*i ngSki n*_n4 E*Xng p*i do m`t *Un* c`ng *a
m`t sa so s2ht cWa *j.
b$ -]2 *Ung *ia *a m`t p*ln *Ung *ia E*Xng t*n s dZng cSdc *o{c *S *ng
t*eo E]t M2 cWa vivc Einm tra M2 c\n* tfi ci^2 F"L *o{c
c$ -]2 trSTc E*i n*~n t*h *a cRng l p*i n*_n t*h *Ung *ia E*Xng p*s *dp
vTi *dp cgng4 ngSki m2a cy bRn toUn b` *a m`t p*ln *Ung *ia trong M2R trqn*
Ein* doan* t*Xng t*Skng4 *a cy tiV2 dsng *o{c bi]n c[i toUn b` *a m`t p*ln
*Ung *ia t*eo *qn* t*mc s dZng t*Xng t*Skng.
Ar!"#e -'. / b2er w*o *as lost t*e rig*t to declare t*e contract avoided or to
reM2ire t*e seller to deliver s2bstit2te goods in accordance wit* article "2
retains all ot*er remedies 2nder t*e contract and t*is 8onvention.
A!SN -'. -gSki m2a4 E*i cy mht M2^n t2Vn bb *W b *dp cgng *a ci
ngSki bRn p*i giao *Ung t*a t*] t*eo ei^2 "24 vn cSdc p*p d2 trq M2^n
s dZng bivn p*Rp bo *` p*Rp lz E*Rc t*eo *dp cgng vU 8Xng STc nU.
Ar!"#e -0
1. I0 t*e seller is bo2nd to re02nd t*e price *e m2st also pa interest on it 0rom
t*e date on w*ic* t*e price was paid
2. T*e b2er m2st acco2nt to t*e seller 0or4 ail beneKts w*ic* *e *as derived
0rom t*e goods or part o0 t*em
!a$ I0 *e m2st maEe restit2tion o0 t*e goods or part o0 t*emL or
!b$ .I0 it is impossible 0or *im to maEe restit2tion o0 all or part o0 t*e goods or to
maEe restit2tion o0 all or part o0 t*e goods s2bstantiall in t*e condition in w*ic*
*e received t*em b2t *e *as nevert*eless declared t*e contract avoided or
reM2ired t*e seller to deliver s2bstit2te goods.
A!SN -0.
1. -]2 ngSki bRn b\ b2`c p*i *oUn lfi giR ti^n *j cng p*i tr ti^n lyi trVn t[ng
sb ti^n ci En t| ngU ngSki m2a cy t*an* toRn.
2. -gSki m2a p*i tr c*o ngSki bRn sb ti^n tSong cSong vTi mji ldi n*2_n mU
*j cy cSdc *Spng t| *Ung *ia *a m`t p*ln *Ung *ia.
a$ E*i *j p*i *oUn lfi toUn b` *a m`t p*ln *Ung *ia4 *a
b$ Q*i *j E*Xng t*n *oUn lfi toUn b` *a m`t p*ln *Ung *ia *a E*Xng t*n
*oUn lfi *Ung t*ac c*ht ctng n*S tqn* trfng *j cy n*_n4 m{c ds *j cy t2Vn bb
*dp cgng b\ *W *a cy ci ngSki bRn giao *Ung t*a t*].
Se"!on VI. @reser8a!on o6 5e Goods
Ar!"#e -*. I0 t*e b2er is in dela in taEing deliver o0 t*e goods or w*ere
pament o0 t*e price and deliver o0 t*e goods are to be made conc2rrentl i0
*e !ails to pa t*e price and t*e seller is eit*er in possession o0 t*e goods or
ot*erwise able to control t*eir disposition t*e seller m2st taEe s2c* steps as are
reasonable in
t*e circ2mstances to preserve t*em. 6e is entitled to retain t*em 2ntil *e *as
been reimb2rsed *is reasonable expenses b t*e b2er.
M\" +. Bio YNin 5`n3 5ga
A!SN -*. Q*i ngSki m2a c*_m tr n*_n *Ung *a E*Xng tr ti^n *o{c E*i vivc
tr ti^n vU vU giao *Ung p*i cSdc ti]n *Un* csng ltc vU *Ung *ia cn nm
dSTi M2^n c\n* coft *a Einm soRt cWa ngSki bRn4 ngSki bRn p*i t*ac *ivn
n*Yng bivn p*Rp *dp lz trong t|ng tqn* *2bng cn bo M2n *Ung *ia. -gSki
bRn ci M2^n giY lfi *Ung *ia c*o tTi E*i ngSki m2a *oUn tr c*o *j cRc c*i p*x
*dp lz.
Ar!"#e -+
1. I0 t*e b2er *as received t*e goods and intends to exercise an rig*t 2nder
t*e contract or t*is 8onvention to reGect t*em4 *e m2st taEe s2c* steps to
preserve t*em as are reasonable in t*e circ2mstances. 6e is entitled to retain
t*em 2ntil *e *as been reimb2rsed *is reasonable expenses b t*e seller.
2. I0 goods dispatc*ed to t*e b2er *ave been placed at *is disposal at t*eir
destination and *e exercises t*e rig*t to reGect t*em4 *e m2st taEe possession
o0 t*em on be*al0 o0 t*e seller provided t*at t*is can be done wit*o2t pament
o0 t*e price and wit*o2t 2nreasonable inconvenience or 2nreasonable expense.
T*is provision does not appl i0 t*e seller or a person a2t*oriDed to. taEe c*arge
o0 t*e goods on *is be*al0 is present at t*e destination. I0 t*e b2er taEes
possession o0 t*e goods 2nder t*is paragrap* *is rig*ts and obligations are
governed b t*e preceding paragrap*.
A!SN -+.
1. -]2 ngSki m2a cy n*_n *Ung vU ci z c\n* s dZng M2^n t| c*bi n*_n *Ung
t*eo *dp cgng *a 8Xng STc nU4 t*q *j p*i t*ac *ivn cRc bivn p*Rp *dp lz
trong n*Yng tqn* *2bng ci cn bo M2n *Ung *ia. -gSki m2a ci M2^n giY lfi
*Ung *ia c*o tTi E*i ngSki bRn *oUn tr c*o mqn* cRc c*i p*x *dp lz.
2. -]2 *Ung *ia gi c*o ngSki m2a cy cSdc c{t dSTi M2^n c\n* coft cWa ngSki
nU tfi noi c]n vU n]2 ngSki m2a s dZng M2^n t| c*bi *Ung t*q *j p*i t*a
m{t ngSki bRn ti]p n*_n *Ung *ia vTi ci^2 Eivn ngSki m2a ci t*n lUm vivc nU
mU E*Xng p*i tr ti^n *Ung vU E*Xng g{p trp ngfi *a cRc c*i p*x bht *dp lz.
:2 c\n* nU E*Xng Rp dZng n]2 ngSki bRn *a ngSki cSdc W M2^n n*_n *Ung
*ia c*o ngSki ci m{t tfi noi c]n. -]2 ngSki m2a ti]p n*_n *Ung t*eo M2 c\n*
cWa E*on nU4 n*Yng M2^n ldi vU ng*}a vZ cWa ngSki m2a cSdc ci^2 c*n*
bng M2 c\n* tfi E*on trVn.
Ar!"#e -,. / part w*o Is bo2nd to taEe steps to preserve t*e goods ma
deposit t*em in a ware*o2se o0 a t*ird person at t*e expense o0 t*e ot*er part
provided t*at t*e expense inc2rred is not 2nreasonable.
A!SN -,. 7Vn nUo b\ b2`c p*i ci n*Yng bivn p*Rp cn bo M2n *Ung *ia4 ci
t*n giao *Ung vUo E*o cWa ngSki t*m ba4 c*i p*x do bVn Eia c*\2 vTi ci^2 Eivn cRc
c*i p*x nU p*i *dp lz.
Ar!"#e --
1. / part w*o is bo2nd to preserve t*e goods in accordance wit* article "% or
"( ma sell t*em b an appropriate means I0 t*ere *as been an 2nreasonable
dela b t*e ot*er part in taEing possession o0 t*e goods or in taEing t*em
bacE or in paing t*e price or t*e cost o0 preservation4 provided t*at reasonable
notice o0 intention to sell *as been given to t*e ot*er part.
2. I0 t*e goods are s2bGect to rapid deterioration or t*eir preservation wo2ld
Involve 2nreasonable expense4 a part w*o is bo2nd to preserve t*e goods in
accordance wit* article "% or "( m2st taEe reasonable meas2res to sell
t*em. To t*e extent possible *e m2st give notice to t*e ot*er part o0 *is
intention to sell.
F. / part selling t*e goods *as t*e rig*t to retain o2t o0 t*e proceeds ot sale an
amo2nt eM2al to t*e reasonable expenses o0 preserving t*e goods and o0
selling t*em. 6e m2st acco2nt to t*e ot*er part 0or t*e balance.
A!SN --.
1. 7Vn nUo p*i bo M2n *Ung *ia t*eo ei^2 "% *a "( ci t*n bRn *Ung ci
bng cRc* t*mc t*xc* *dp n]2 bVn Eia c*_m tr m`t cRc* p*i lz trong vivc ti]p
n*_n *a lh lfi *Ung *o{c trong vivc tr ti^n *Ung *a cRc c*i p*x bo M2n4
n*Sng p*i t*Xng bRo *dp lz c*o bVn Eia z c\n* p*Rt mfi *Ung *ia.
2. -]2 *Ung *ia t*2`c lofi ma2 *ng *a vivc bo M2n s g~ ra cRc c*i p*x
p*i lz t*q bVn nUo ci ng*}a vZ bo M2n *Ung *ia t*eo ei^2 "% *a "( p*i ti]n
*Un* cRc bivn p*Rp *dp lz cn bRn ci. T*eo E* nng cWa mqn* *j p*i t*Xng bRo
c*o bVn Eia bi]t z c\n* p*Rt mfi ci.
F. 7Vn bRn *Ung cSdc M2Vn giY lfi t| ti^n bRn *Ung m`t sb ti^n ngang vTi cRc
c*i p*x *dp lz cWa vivc 7o M2n vU p*Rt mfi *Ung *ia. P*ln cn lfi cSdc tr
c*o bVn Eia.
@ART IV. FINA2 @ROVISIONS
/rticle -9. T*e Secretar&Aenaral o0 t*e >nited -ations is *ereb designated as
t*e depositar 0or t*is 8onvention.
@5sn 0. N1vNG =UY AwN1 CUxI CyNG
A!SN -9. T[ng T*S Ez +6: cSdc c* c\n* lU ngSki giY lS2 c*in2 bn 8Xng STc
nU.
Ar!"#e 9.. T*is 8onvention does not prevail over an international agreement
w*ic* *as alread been or ma be entered into and w*ic* contains provisions
concerning t*e matters governed b t*is 8onvention4 provided t*at t*e parties
*ave t*eir places o0 b2siness in States parties to s2c* agreement.
A!SN 9.. 8Xng STc nU E*Xng n* *Spng c]n bht E m`t t*a t*2_n M2bc t]
nUo cy cSdc *a s cSdc Ez E]t bao ggm n*Yng M2 c\n* liVn M2an c]n cRc vhn
c^ lU cbi tSdng ci^2 c*n* cWa 8Xng STc nU4 vTi ci^2 Eivn cRc bVn cWa *dp cgng
p*i ci trZ sp t*Song mfi tfi cRc M2bc gia t*Un* viVn cWa t*a t*2_n M2bc t] ci.
Ar!"#e 91
1. T*is 8onvention is open 0or signat2re at t*e concl2ding meeting o0 t*e >nited
-ations 8on0erence on 8ontracts lor t*e International Sale o0 Aoods and will
remain open 0or signat2re b all States at t*e 6eadM2arters o0 t*e >nited
-ations -ew ?orE 2ntil F0 September 13"1.
2. T*is 8onvention is s2bGect to ratiKcation acceptance or approval b t*e
signator States.
F. T*is 8onvention is open 0or accession b all States w*ic* are not signator
States as 0rom t*e date it is open 0or signat2re.
#. Instr2ments o0 ratiKcation4 acceptance4 approval and accession are to be
deposited wit* t*e Secretar&Aeneral o0 t*e >nited -ations.
A!SN 91.
1. 8Xng STc nU cSdc cn ng c*o cRc bVn Ez E]t tfi p*iVn *jp b] mfc cWa 6`i
ng*\ +6: v^ 6dp cgng 92a bRn 6Ung *ia :2bc t]4 vU s cn ng c*o cRc M2bc
gia Ez E]t tfi trZ sp +6: tfi -ew ?orE4 c*o tTi ngU F1&11&13"1.
2. 8Xng STc nU p*i cSdc sa p*V c*2un4 c*hp t*2_n *a c*2un cWa cRc M2bc
gia Ez E]t.
F. 8Xng STc nU cSdc cn ng cn tht c cRc M2bc gia E*Xng Ez tVn t*am gia4 En t|
ngU 8Xng STc cn ng c*o cRc bVn Ez E]t.
#. Vivc p*V c*2un4 c*hp n*_n4 c*2un vU ti]p c_n p*i cSdc cng Ez vTi T[ng
T*S Ez +6:.
Ar!"#e 9%
1. / 8ontracting State ma declare at t*e time o0 signat2re4 ratiKcation4
acceptance4 approval or accession
t*at it will not be bo2nd b Part II o0 t*is 8onvention or t*at it will not be bo2nd
b Part III o0 t*is 8onvention.
2. / contracting State w*ic* maEes a declaration in accordance wit* t*e
preceding paragrap* in respect o0 Part II or Part III o0 t*is 8onvention is not to be
considered a 8ontracting State wit*in paragrap* !1$ o0 /rticle 1 o0 t*is
8onvention in respect o0 matters governed b t*e Part to w*ic* t*e declaration
applies.
A!SN 9%.
1. 9`t M2bc gia t*Un* viVn ci t*n vUo ltc Ez E]t4 p*V c*2un4 c*hp n*_n4 c*2un
*a gia n*_p4 t2Vn bb s E*Xng b\ rUng b2`c bpi P*ln II *a P*ln III cWa 8Xng
STc nU.
2. 9`t M2bc gia t*Un* viVn4 t*eo c^2 E*on trVn cSa ra m`t t2Vn bb v^ P*ln II
*a P*ln III cWa 8Xng STc nU s E*Xng cSdc coi lU m`t M2bc gia t*Un* viVn t*eo
ng*}a cWa Q*on 1 ei^2 1 8Xng STc nU v^ cRc vhn c^ M2 c\n* cWa 8Xng STc ci
liVn M2an c]n t2Vn bb ci.
Ar!"#e 9'
1. I0 a 8ontracting State *as two or more territorial 2nits in w*ic*4 according to
its constit2tion4 diNerent sstems o0 law are applicable in relation to t*e matter
dealt wit* in t*is 8onvention4 it ma4 at t*e lime o0 signat2re4 ratiKcation4
acceptance4 approval or accession4 declare t*at t*is 8onvention is to extend to
all its territorial 2nits or onl to one or more o0 t*em4 and ma amend its
declaration b s2bmitting anot*er declaration anot*er declaration at an time.
. 4
2. T*ese declarations are to be notiKed to t*e depositar and to state expressl
t*e territorial 2nits to w*ic* t*e 8onvention extends.
F. It4 b virt2e o0 a declaration 2nder t*is /rticle4 t*is 8onvention extends to one
or more b2t not all o0 t*e territorial 2nits o0 a 8ontracting State4 and it t*e place
o0 b2siness o0 a part is located in t*at State4 t*is place o0 b2siness 0or t*e
p2rposes o0 t*is 8onvention4 is considered not to be in a 8onvention4 extends.
#. It a 8ontracting State maEes no declaration 2nder paragrap* !1$ o0 t*is
article4 t*e 8onvention is to extend to all territorial 2nits o0 t*at State.
A!SN 9'.
1.
2.
F.
Ar!"#e 90
1. Two or more 8ontracting States w*ic* *ave t*e same or closel related legal
r2les on matters governed b t*is 8onvention ma at an time declare t*at
*e 8onvention is not to appl to contracts o0 sale or to t*eir 0ormation w*ere
t*e parties *ave t*eir places o0 b2siness in t*ose Slates. S2c* declarations
ma be made Gointl or b reciprocal 2nilateral declarations.
2. / contracting State w*ic* *as t*e same or closel related legal r2les on
matters governed b t*is 8onvention as one or more non&8ontracting States
ma at an time declare t*at t*e 8onvention is not to appl to contract o0
sale. or to t*eir 0ormation w*ere t*e parties *ave t*eir places o0 b2siness in
t*ose States.
F. I0 a State w*ic* is t*e obGect o0 a declaration 2nder t*e preceding paragrap*
s2bseM2entl becomes a 8ontracting State4 t*e declaration made will4 as
0rom t*e date on w*ic* t*e 8onvention enters into 0orce in respect o0 t*e new
8ontracting State4 *ave t*e eNect o0 a declaration maEes 2nder paragrap*
!1$4 provided t*at t*e new 8ontracting State Goins in s2c* declaration or
maEes a reciprocal 2nilateral declaration.
A!SN 90.
1.
2.
F.
Ar!"#e 9*. /n state ma declare at t*e time o0 t*e deposit o0 its instr2ment
o0 ratiKcation4 acceptance4 approval or accession t*at it will not be bo2nd b
s2bparagrap* !1$ !b$ o0 article 1 o0 t*is 8onvention.
A!SN 9*.
1.
2.
F.
Ar!"#e 9+. / 8ontracting State w*ose legislation reM2ires contracts o0 sale to
be concl2ded in or evidenced b writing ma at an time maEe a declaration in
accordance wit* article 12 t*at an provision o0 article 114 article 234 or Part II o0
t*is 8onvention4 t*at allows a contract o0 sale or its modiKcation or termination
b
agreement or an oNer4 acceptance4 or ot*er indication o0 intention to be made
in an 0orm ot*er t*an in writing4 does not appl w*ere&an part *as *is place
o0 b2siness in t*at State.
A!SN 9+.
Ar!"#e 9,
1. Declarations made 2nder t*is 8onvention at t*e time o0 singnat2re are
s2bGect to conKrmation 2pon ratiKcation4 acceptance or approval.
2. Declarations and conKrmations o0 declarations are to be in wiling and be
0ormall notiKed to t*e depositar.
F. / declaration taEes eNect sim2ltaneo2sl wit* t*e entr into 0orce t*is
8onvention in respect o0 t*e State concerned. 6owever4 a declaration o0
w*ic* t*e depositar receives 0ormal notiKcation a0ter s2c* entr into 0orce
taEes eNect on t*e Krst da o0 t*e mont* 0ollowing t*e expiration o0 six
mont* a0ter t*e date o0 its receipt b t*e depositar. 1eciprocal 2nilateral
declarations 2nder article 3# taEe eNect on t*e Krst da o0 t*e mont*
0ollowing t*e expiration o0 six mont*s a0ter t*e receipt o0 t*e latest
declaration b t*e depositar.
#. /n State w*ic* maEes a declaration 2nder t*is .8onvention ma wit*draw it
at an time b a 0ormal notiKcation in writing addressed to t*e deposition.
S2c* wit*drawal is to taEe eNect on t*e Krst da o0 t*e mont* 0ollowing t*e
expiration o0 six mont*s a0ter t*e date o0 receipt o0 t*e notiKcation b t*e
depositar.
%. / wit*drawal o0 a declaration made 2nder article 3# renders inoperative4 as
0rom t*e date on w*ic* on w*ic* t*e wit*drawal taEes eNect4 an reciprocal
declaration made b anot*er State 2nder t*at article.
A!SN 9,.
1.
2.
F.
Ar!"#e 9-. -o reservations are permitted except t*ose expressl
a2t*oriDed in t*is 8onvention.
A!SN 9-.
Ar!"#e 99.
1. T*is 8onvention enters into 0orce4 s2bGect to t*e provisions o0 paragrap* !($
o0 t*is /rticle4 on t*e Krst da o0 t*e mont* 0ollowing t*e expiration o0 twelve
mont*)s a0ter t*e date o0 deposit o0 t*e tent* instr2ment o0 ratiKcation4
acceptance4 approval or accession4 incl2ding an instr2ment w*ic* contains a
declaration made 2nder article 32.
2. P*en a State ratiKes4 accepts4 approves or accedes to t*is 8onvention a0ter
t*e deposit o0 t*e tent* instr2ment o0 ratiKcation4 acceptance4 approval or
accession4 t*is 8onvention4 wit* t*e exception o0 t*e Part excl2ded4 enters
into 0orce in respect o0 t*at State4 s2bGect to t*e provisions o0 paragrap* !($
o0 t*is article4 on t*e Krst da o0 t*e mont* 0ollowing t*e expiration o0 twelve
mont*s a0ter t*e date o0 t*e deposit o0 its instr2ment o0 ratiKcation4
acceptance4 approval or accession.
F. / State w*ic* ratiKes4 accepts4 approves or accedes to t*is 8onvention and is
part to eit*er or bot* t*e 8onvention relating to a >ni0orm +aw on t*e
,ormation o0 8ontracts 0or t*e International Sale o0 Aoods done at T*e 6ag2e
on 1st ;2l 13(# !T*e 13(# 6ag2e ,ormation 8onvention$ and t*e 8onvention
relating to a >ni0orm +aw on t*e International Sale o0 Aoods done at T*e
6ag2e on 1 ;2l 13(# !T*e 13(# 6ag2e Sales 8onvention$ s*all at t*e same
time deno2nce4 as t*e case ma be4 eit*er or bot* t*e 13(# 6ag2e
,ormation 8onvention and t*e 13(# 6ag2e ,ormation 8onvention o0 t*e
-et*erlands to t*at eNect.
#. / State part to t*e 13(# 6ag2e Sales 8onvention w*ic* ratiKes4 accepts4
approves or accedes to t*e present 8onvention and declares or *as declared
2nder article 32 t*at it will not be bo2nd b Part III o0 t*is 8onvention s*all at
t*e time o0 ratiKcation4 acceptance4 approval or accesion deno2nce t*e 13(#
6ag2e Sales 8onvention b noti0ing t*e Aovernment o0 t*e -et*erlands to
t*at eNect.
%. / State part to t*e 13(# 6ag2e ,ormation 8onvention w*ic* ratiKes4
accepts4 approves or accedes to t*e present 8onvention and declares or *as
declared 2nder /rticle 32 t*at it will not be bo2nd b Part III o0 t*is
8onvention s*all at t*e time o0 ratiKcation4 acceptance4 approval or accession
deno2nce t*e 13(# 6ag2e ,ormation 8onvention b noti0ing t*e
Aovernment o0 t*e -et*erlands to t*at eNect.
(. ,or t*e p2rpose o0 t*is /rticle4 ratiKcation4 acceptances4 approvals and
accessions in respect o0 t*is 8onvention b States parties to t*e 13(# 6ag2e
,ormation 8onvention or to t*e 13(# 6ag2e Sales 8onvention s*all not be
eNective 2ntil s2c* den2nciations as ma be reM2ired on t*e part o0 t*ose
States in respect o0 t*e latter two 8onventions *ave t*emselves become
eNective. T*e depositar o0 t*is 8onvention s*all cons2lt wit* t*e
Aovernment o0 t*e -et*erlands4 as t*e depositar o0 t*e 8onventions4 so as
to ens2re necessar co&ordination in t*is respect.
A!SN 99.
1.
2.
F.
Ar!"#e 1..
1. T*is 8onvention applies to t*e 0ormation o0 a contract onl w*en t*e proposal
0or concl2ding t*e contract is made on or a0ter date w*en t*e 8onvention enter
into 0orce in respect o0 t*e 8ontracting States re0erred to in s2bparagrp* !1$ !a$
or t*e 8ontracting State re0erred to in s2bpsrsgrap* !1$ !b$ o0 /rticle 1.
2. T*is 8onvention applies onl to contract concl2ded on or a0ter t*e date w*en
t*e 8onvention enters into 0orce in respect o0 t*e 8ontracting States re0erred to
in s2bparagrap* !1$!a$ or t*e 8ontracting State relered to in s2bparagrap* !1$
!b$ o0 /rticle 1.
A!SN 1...
1.
2.
F.
Ar!"#e 1.1
1. / 8ontracting State ma deno2nce t*is 8onvention4 or Part II or Part III o0 t*e
8onvention4 b a 0ormal notiKcation in writing addressed to t*e depositar.
2. T*e den2nciation taEes eNect on t*e Krst da o0 t*e mont* 0ollowing t*e
expiration o0 twelve mont*s b t*e depositar. P*ere a longer period 0or t*e
den2nciation to taEe eNect is speciKed in t*e notiKcation4 t*e den2nciation
taEes eNect 2pon t*e expiration o0 s2c* longer period a0ter t*e notiKcation is
received b t*e depositar.
Done at Vienna4 t*is da o0 elevent* da o0 /pril4 one t*o2sand nine *2ndred
and eig*t4 in a single original4 o0 w*ic* t*e /rabic4 8*inese4 Englis*4 ,renc*.
12ssian and Spanis* texts are eM2all a2t*entic.
I- PIT-ESS P6E1E =, t*e 2ndersigned plenipotentiaries being d2l a2t*oriDed
b t*eir respective Aovernments *ave signed t*is 8onvention.
@